betting on the iPhone

You can bet on everything these days!

BetUS.com -- which appears to be mostly a sports betting site -- is giving odds on various iPhone-related events. (I came to this via Marginal Revolution.)

I can't get inside, but livescience.com (the first link above) claims that BetUS.com is offering the following odds:

Consumers are reported camping out waiting for an iPhone—3/1

At first glance, I'd take this bet. People camp out now for product launches, it's What They Do in this consumer culture. And the sort of people who do that are, to some extent, Apple's target market. However, the iPhone is being released at 6pm local time on Friday. And the iPhone is expensive -- $500 just for the physical device, and then depending on who you believe somewhere around $80 for the service -- so you've got to think that maybe the people buying them will have jobs. (I'm sure there's a Steve Jobs joke in here somewhere, but I can't find it.)

Apple’s stock jumps at least 10% in value in regards to the price on 6/30/07—1/2

Technically, this can't happen. Why? Because June 30 is a Saturday. Stocks don't trade on Saturdays. But assuming they mean the next trading day after the release -- that is, Monday, July 2nd -- this would be an interesting disproof of the efficient market hypothesis. This hypothesis claims that the price of a traded asset -- such as Apple stock -- reflects all the knowledge that's available about the company.

On the other hand, Apple has been trading around 125 lately; it was at 90 as recently as mid-April. Either a lot of information about Apple has suddenly come out, or investors are just crazy. Or both.

Consumers pay at least three times the original price ($1,500) on ebay - 2/1

Hard to call. Did consumers learn from when people tried to flip PS3s and Xboxes last winter? Sure, some people pulled it off, but a lot got stuck with them.

iPhone spontaneously combusts—150/1

I hope this is a joke.

Judging from the little information I have, though, and the fact that the odds are simple integer ratios, I'm guessing that these odds don't move, but are set by BetUS.com. I was expecting something like tradesports.com or intrade.com, in which people can buy and sell "contracts" on various events -- these are rapidly emerging as an interesting means of predicting the probability of various "complicated" events, where one can't come up with a simple model to make a decent guess at the probability of an event. We expect that, if people are willing to pay $25 for a "contract" that pays out $100 if people are reported camping out waiting for an iPhone, then if we could repeat this experiment over and over again, one time out of four there would be people camping out. (The question of what this even means is kind of tricky, though, because there aren't going to be three more iPhones. Tonight I prefer the interpretation of complicated probabilities like these in terms of wagers, but that could always change.)

edit, 5:08 pm: People are already camping out. Reuters reports that as of this morning, there were four people in line outside the Apple Store on 5th Avenue in Manhattan.