Crowdpark: Taking Facebook and now Florida by storm

Crowdpark logoCrowdpark is an impressive, well-designed prediction market game that’s already attracted 500,000 monthly active users on Facebook, the 11th fastest growing Facebook app in April.

It’s a dynamic betting game with an automated market maker, not unlike Inkling Markets in functionality (or even Predictalot minus the combinatorial aspect). What stands out is the flashy UI, both literally and figuratively. The look is polished, slick, refreshing, and richly drawn. It’s also cutesy, animation-happy, and slow to load. Like I said, Flash-y in every way. The game is well integrated into Facebook and nicely incorporates trophies and other social rewards. Clearly a lot of thought and care went into the design: on balance I think it came out great.

Crowdpark is a German company with an office in San Francisco. In addition to their Facebook game, they have German and English web versions of their game, and white-label arrangements with gaming companies. They launched in English just last December.

Crowdpark’s stunning growth contrasts with decidedly more mixed results on this side of the Atlantic. I wonder how much of Crowdpark’s success can be attributed to their German roots, their product, their marketing, or other factors?

Crowdpark has an automated market maker they call “dynamic betting” that I can’t find any technical details about [1]. Here’s their well-produced video explanation:

They say it’s “patent pending”, though my colleague Mohammad Mahdian did some nice reverse engineering to show that, at least in their Facebook game, they’re almost certainly using good-old LMSR. Here is a graph of Crowdpark’s market maker price curve for a bet priced at 1%:

Crowdpark's automated market maker price curve

Here is the raw data and the fit to LMSR with b=20,000.

risk   to win (CP)   to win (LMSR)
1 91 91.079482
2 181 181.750593
5 451 451.350116
10 892 892.847929
20 1747 1747.952974
50 4115 4115.841760
100 7535 7535.378665
200 13019 13019.699483
500 23944 23944.330406
600 26594 26594.687310
700 28945 28945.633048
800 31059 31059.076097
900 32979 32979.512576
1000 34740 34740.000000

Still, there’s a quote buried in the video at 0:55 that caught my attention: “you’re current profit is determined by the fluctuation of the odds”.

There’s only one market maker that I know of where the profit fluctuates with the odds, and that’s my own dynamic parimutuel market, which by coincidence recently went from patent pending to inventor cube delivered. 🙂

David Pennock's dynamic parimutuel market (DPM) patent cube - 4/2011

With every other market maker, indeed almost every prediction market, the profit is fixed at the time of the bet. Add to that the fact that Crowdpark bought a majority stake in Florida horse racing circuit Saratoga Racing Inc. and plans to operate all bets exclusively through their system, leads me to wonder if they may have some kind of parimutuel variant, the only style of betting that is legal in the US.

Of course, it may be that I simply misinterpreted the video.


[1] The technical exec at Crowdpark seems to be Aleksandar Ivanov. I found a trade press paper on (internal) prediction markets he wrote in 2009 for the Journal of Business Forecasting.

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