The Augur Prediction Market Claims The Patriots Will Win The SuperBowl
Why the Augur prediction market platform will overtake Vegas for sports betting.
Ah, the Super Bowl. An event comprised of buffalo wings, your favorite cheap beer *cough* Pabst Blue Ribbon *cough*, and great friends(who aren’t Rams fans). It’s a day filled with wonderful memories — jumping up and down in joy, yelling at professional athletes(we know you could have made that catch), and watching Grandpa fall asleep before half-time.
And of course, let’s not forget betting. After crushing my fantasy league, it’s time to show everybody that I can win when it counts — by accurately predicting the winner of the Super Bowl.
But who should I bet on, who’s more likely to win? The prediction market platform, Augur, has the answer.
What is Augur?
Augur is a prediction market platform in which any individual can create or bet on a market(game, event, election). The Augur protocol, which runs on top of the Ethereum blockchain, allows individuals to buy or sell shares of a potential outcome.
For instance, a market creator can generate the market for: “Which team will win the SuperBowl?”
The creator of the market can define a set of possible outcomes, like “Patriots” or “Rams” At the start, these options are split into shares, with all shares summing to $1.00, or a 100% probability. Possessing a winning shares earns $1.00. For instance, if there’s a 51 percent chance the Rams will win — and they do — each Ram share owner will receive $1.00 per share.
Why would I bet on Augur over Vegas?
One key difference between Augur and Vegas is that the market maker(a random individual on Augur) doesn’t dictate the odds of an event outcome. The platform relies on the “wisdom of the crowd” to decide the probability of any outcome. The concept, based on proven scientific evidence states that a large number of people(the crowd) will almost always be more accurate than experts when it comes to predicting the outcome of events. Think about the accuracy of NFL or NBA analysts or prominent talk show hosts like Chris Broussard, Jason Whitlock, Collin Cowherd, Shannon Sharpe, and Skip “SKIIEEEEUP” Bayless. While no doubt entertaining, these experts are often wrong at predicting the winners of every game. If they could accurately predict winners, you can be sure Shannon and Skip would bet money instead of cases of mountain dew soda. Personally, I’d prefer Dr. Pepper.
A new survey from the American Gaming Association, conducted by Morning Consult, finds that nearly 23 million (or 1 in 10) American adults plan to bet on the big game this year. The betting is predicted to hit $6 billion total, most of which will be conducted illegally via online offshore sportsbooks, local bookies, or bets amongst friends. In fact, a record 158.6 million was wagered with Nevada sportsbooks during last year’s Super Bowl. Because so few people can bet legally, legal bets often lead to the house taking large fees. According to Betfirm, since 1991, the Nevada sportsbook has averaged a 7.37% profit on Super Bowl bets, which amounts to an average of $6.2 million each year in profit and the expected profit for this year’s Super Bowl is $11.7 million. On Augur, the fees are 1.97% for the highest volume Super Bowl bet, which would add up to $3.1 million.
Do you want Vegas taking 7.37% of the total pile just because there’s no place else to go?
Online gambling will outpace Vegas
This is the first year legal sports betting has grown in America because the Supreme Court ruled that the Professional and Amateur Sports Protection Act — which essentially limited sports betting to one state — was unconstitutional.
Before this year, Nevada was the only state that allowed for full sports betting. Since the ruling, seven other states are now providing individuals with the ability to place a wager on Super Bowl 53 legally. With most states likely to offer sports betting in the future, Vegas will begin to lose its monopoly of the sports betting market. Online and decentralized platforms like Gnosis and Augur will usurp centralized sports betting to become the gambling platforms of the future.
How to place a bet with Augur
1. Choose an Event
Choose an event to predict. Anything is fair game, from the next presidential election to the success of a company’s product.
2. Create a Market
Check the list of open markets to see if a market already exists for your event. If not, create one.
3. Buy and Sell Shares
Trade on the outcome of your event by buying and selling shares in its market. Buy shares to go long on an outcome, or sell shares to short it.
4. Report the Outcome
Report the winning outcome of the event after it occurs. Other users can dispute your report if they don’t agree.
5. Claim Your Winnings
Users who hold shares of the winning outcomes are paid out from the market contract when the market is resolved.
The highest all-time earner on Augur has made 734 ETH over 177 trades. At today’s ETH price ($107.00) that amounts to nearly USD 80,000, however, the amount is likely higher depending on when the individual cashed out. On the other end, the biggest loser has made 80 trades and lost 382 ETH or just over USD 40,000.
The takeaway, it pays to be right.
Who will win the Super Bowl?
According to Vegas, as of Jan. 29, five days before the game, 52% of bets are being placed on the Rams, and the Patriots are favored at most sportsbooks by 2.5 points.
Below is one of several Augur markets for the 2019 Super Bowl made before the playoffs started. As individuals bet, the likelihood of the winner changes reflecting the overall confidence of the crowd. This prediction market event favors the Patriots by 3% over the Rams.
Another Augur market, between only the Rams and the Patriots, shows the Patriots holding a 54.9% chance of winning the Super Bowl. The crowd has spoken, now we just need to see if they are right.
There are even some fun and unpredictable markets on Augur that couldn’t exist anywhere else.
Surely it’ll be lime green, the best flavor of Gatorade.
Over-time AKA final thoughts
Prediction markets bring the potential for new markets, such as “How many plays will Tony Romo be able to forecast correctly before they happen?”
My guess, 4.
More compelling, are the new business models that merge into existence with Augur. For example, users can build their reputation by proving their ability to predict the future. Worst case scenario — Augur becomes a better Vegas, offering lower fees and increased capital efficiency. In the best case scenario, the platform creates new economic models and a not-so-small shift toward a more merit-based economy.
Either way, Go Pats.
Disclaimer. The views, information and opinions expressed are solely those by the author above do not necessarily represent the views of Consensys AG. This article is a general interest piece and is not an endorsement of any betting or gambling platforms. Any reference in this article to any person, organization, activity, products, or services does not constitute an endorsement or recommendation of ConsenSys. This article does not constitute legal or other professional advice or services. ConsenSys is a decentralized community with ConsenSys Media being a platform for members to freely express their diverse ideas and perspectives. To learn more about ConsenSys and Ethereum, please visit our website.
