TradeSports, the Irish betting site that hosts a multitude of sports bets as well as questions on legal claims (which Supreme Court justice will leave the bench next), current events (which city will host the next Olympics, will Social Security reform pass this term) is making a move to enter the US market. Their recent market on the question of which Cardinal would succeed Pope John Paul II correctly picked Cardinal Ratzinger as the front runner. They had fine-grained markets in all the well-known Cardinals and had aggregated markets by region (Europe, Africa, South America) and by ethnicity.

TradeSports’s announcement says that they have established a subsidiary in the US, which will pursue an application with the CFTC to be a regulated exchange. They hope to offer contracts on “such subjects as weather, economic indicators and financial indices.”

Let’s hope the competition is good for TradeSports as well as HedgeStreet and anyone else who is pursuing this route more quietly. I hope at least one of the entrants can structure their application so the questions they offer are open-ended and new kinds of questions can be added dynamically. But I would expect the first applications to specify a complete list of their offerings in order to get approval. That means they’ll be limited to a narrow spectrum of financial derivatives. These derivatives are interesting, but won’t be traded widely very soon. It’s hard to attract large players with markets as thin as HedgeStreet has. More topical questions would lead to more interest, though it would, of course, be harder to argue that the point is “to manage certain financial risks that are currently not provided for on traditional futures exchanges.”