Online Oscar wagering gets its props

The growth in the popularity of online betting exchanges, like Intrade.com, and a host of others, has improved their accuracy in predicting events like the Oscars, says Leighton Vaughan Williams, director of the Betting Research Unit at Britain's Nottingham Trent University, who has studied how well efficient betting markets predict future events.

Vaughan Williams points to Jamie Foxx, who is the favorite in the best actor race for his portrayal of blind singer Ray Charles in “Ray.” Betting Web sites are offering strong odds that Foxx will win the award, suggesting that the market has made a determination of who will win, based on the Oscar wagering already made.

“This year, more than any other year, the markets are seeing a clear favorite in the best actor category, and the odds on Jamie Foxx winning are astonishing,” Vaughan Williams said. “So I think Oscar betting is becoming much more sophisticated. And it’s improving because there are so many betting markets out there now, and they’re giving people the hard data and the confidence they need so they can make their own decisions instead of using guesswork.”

Vaughan Williams says betting markets are likely to be just as accurate in their Oscar predictions as they were at predicting the outcome of last year’s election: “There’s only a small pool of voters for the Academy Awards, but there’s also more scope for insider information to leak out. So some people out there have a pretty good idea who will win, and they could influence the odds.”

Online betting experts like Vaughan Williams and Knesevitch see the popularity, and accuracy, of betting exchanges and Web sites growing in the years ahead, potentially helping film studios to hedge against the risk that their next movie is a flop, or other unforeseen costs.

“We think that eventually [Intrade.com] will be the type of robust market where commercial interests like studios will come to hedge that risk,” Knesevitch said. “Let’s say you’re Miramax and you want to hedge the risk of ‘Aviator’ not winning the Academy Award. You know that it costs over $100 million to produce a film like that, and you have a great deal of reputational and financial risk on the outcome of this event. Would you like to take some of that risk off the table?”

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