HSX goes real-money

By Felix Salmon
February 24, 2010
Lauren Hatch mentions that the Hollywood Stock Exchange, which is to begin real-money trading on April 20, "has been just-for-fun since 1998". What she doesn't mention is that the company was sold to Cantor Fitzgerald with the express intention of turning it into a real-money exchange all the way back in 2001; it's taken nine years to get the requisite permissions.

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Lauren Hatch mentions that the Hollywood Stock Exchange, which is to begin real-money trading on April 20, “has been just-for-fun since 1998″. What she doesn’t mention is that the company was sold to Cantor Fitzgerald with the express intention of turning it into a real-money exchange all the way back in 2001; it’s taken nine years to get the requisite permissions.

So while I’m happy to see a real-money prediction market finally get up and running on a fully-legal basis in the United States, it seems the barriers to entry in this business are so enormous that even Cantor Fitzgerald would probably not have bothered had they known what a hassle it would be.

A lot of the details about the new exchange remain unclear, including the degree to which it’s going to be accessible to ordinary punters as opposed to sophisticated investors. Whatever happens, its mechanism for returning money to participants can’t be worse than InTrade’s.

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