The promise of prediction markets

There is an article in latest Science journal on The Promise of Prediction Markets (pdf) (it has 22 authors and is only two papers long!) The key point of the piece is the problems caused by regulation for the development of these markets:

Unfortunately, however, current federal and state laws limiting gambling create significant barriers to the establishment of vibrant, liquid prediction markets in the United States. We believe that regulators should lower these barriers by creating a legal safe harbor for specified types of small stakes markets, stimulating innovation in both their design and their use.

I wonder what the situation is in New Zealand?

There is a website on which you can find regular updates on what's happening in prediction markets. The site covers ongoing research that provides guidelines, prescriptions, rules, conditions, action statements, or advice about what to do in given situations.

(HT: Freakonomics)