New Zealand website iPredict allowed users to place bets on pretty much any political outcome they could imagine. For IRL, Josie Adams talks to the man who crashed it with a bet on Peter Dunne.
It was a cold Dunedin winter, and scarfie Beau Murrah was keeping himself warm by the light of his computer. United Future leader Peter Dunne was on the news. He was suspected to be behind the leak of the Kitteridge report, which had revealed the government was unlawfully spying on people. It was spies and drama and intrigue, perfect fodder for the hottest political barometer 2013 had to offer: iPredict.
It was one of only three websites (or four if you include its offspring, PredictIt) where you could bet on futures in a very literal sense of the word, not a fiscal one. “Julian Assange to leave the Ecuadorean Embassy by 1 Jan 2014” had long odds. “Will Auckland Council add a new bin for glass collection?” looked like a safer bet.
It’s long gone now: iPredict closed its books in 2016, after then-associate justice minister Simon Bridges called it a “legitimate money laundering risk”. In response, Geoff Todd, the director of VicLink – which co-owned iPredict alongside the New Zealand Institute for the Study of Competition and Regulation – explained the average withdrawal from iPredict was just $191 and was therefore unlikely to finance terrorist activity. “We thought we had made it part of the fabric of New Zealand,” he said at the time. And it was: at universities people bet on student politics. Twitter users could bet on central government drama. Finance wonks could have a bit of fun predicting market closes and petrol prices.
Whether it was a legitimate research tool or a money laundering scheme was a matter of opinion, and Murrah’s opinion of the site was low. “I thought it was terrible,” he says. “So I spent $60 and the site crashed.”
He was watching the news story on Dunne and the Henry inquiry when he found himself drawn to iPredict. “I heard they were stock trading about whether he was likely or not to have been found to have leaked the report or whatever,” he remembers. “And I found myself being like, ‘Gosh, these guys are right wing libertarian, y’know, ideological’…” he pauses. “I just was like, ‘I wanna cause some trouble.’”
So he placed a well-timed $60 bet: “Peter Dunne more likely than not to be found the source of the GCSB leaks by the Henry inquiry.” It was the evening of June 6, the day before the inquiry’s report was to be released. The official iPredict Twitter account noticed: “Dunne leak stock back to 60% now. Was someone trying to spend a little money to make Dunne’s week even worse?”
About 30 minutes and a lot of trading activity later, the website was down. It looked, iPredict mused, like a DoS attack. “I didn’t expect the site to crash,” says Murrah. “I did expect it to cause a flurry of trades, like a run-on-the-market kinda thing.”
He was right to have that expectation. The next day, Stuff reported on a “surge in activity” on this iPredict stock. It wasn’t just Murrah – he’d kickstarted an avalanche of bets, and the Dunne stock became hectically volatile. At 11.30am it was at 88%. At 2.48pm it was 25%. When Dunne resigned as minister that afternoon, after he was found to have withheld information from the inquiry, the odds went to 99%. iPredict stated trading volumes were “very high” on the Dunne/Henry Inquiry stock, and around 4.30pm it closed the stock.
Conspiracy theory: The person buying up the iPredict stock is Peter Dunne, in case he has a drop in income next week :-)
— David Farrar (@dpfdpf) June 7, 2013
“It was just groupthink and collective speculation that drove the mayhem,” says Murrah. The high volume of trades against Dunne made it look like a safe bet, but nobody was reading the fine print: the inquiry had to name Dunne as likely to be the leak. This didn’t happen. All those gamblers lost.
Another stock affected by all the ruckus was “NZ Minister to go in 2013”. Whether Dunne was named as the leak or not, this was a surer bet. “I don’t think my $60 helped make him resign,” Murrah says. But he feels the website crash, the tweets, and the Stuff article about stock movement are notable. “You can’t buy that sort of press impact anywhere else so cheaply,” Murrah wrote in his Critic column that year. “The fact that my hunch about Dunne turned out to be correct when the actual report came out was an added bonus.”
Today Murrah lives in the US. He’s sending me voice notes from the lush state of Washington, but he hasn’t forgotten the economic grub of New Zealand politics. “I remember in Dirty Politics, Hager talked about Act and National people making money off iPredict – it’s just something that doesn’t stand up when it gets exposed to the outside world. It’s anti-competitive, and not a good idea,” he says. “That’s my opinion, anyway.”
Recently, iPredict’s liquidators have reached out asking old gamblers to get in touch. You could be owed some of that Dunne money.
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