BluBet lets you and your friends bet on anything, while avoiding the rather controversial use of real money in online gambling. On BluBet, players will be able to place bets on anything from Brittany’s sex life, to Facebook outgrowing MySpace. The site is launching out of a quiet beta and is backed with $225,000 from Jawed Karim (Co-Founder of YouTube), Kevin Hartz (Co-Founder of Xoom), Joe Greenstein (Co-Founder and CEO of Flixster) and Keith Rabois (Former PayPal & LinkedIn Executive and Current Slide Executive).
You start off with 30,000 BluBucks, their fake currency. Bets are based on topics (technology, politics, business), much like a news site. Anyone can post a bet, which consists of a question, a pot, and an ante.
Bets are broken into two types of categories, polls and challenges. Polls base the outcome of the bet on the most popular response. Challenges base the winners on the outcome of some real world event (e.g who wins a football game). Every bet is live for a set period of time, with challenges needing the person initiating the bet to list the final outcome. You get 1,000 extra BluBucks for posting a bet and winners split the pots amongst themselves. Your winnings rank you on a leader board and are tracked in your personal profile. If you go bust, it’s marked on your record and you restart with 10,000 BluBucks.
Fraudulent bets, where users rally to affect the outcome, are naturally a concern. However, they’ve implemented a system where players rate how good a bet was after the bet closes. The rating for the individual bet is added to a users overall rating, hopefully making crooks with low ratings easy to avoid. Otherwise it’s a case of “Caveat Emptor” with spending your virtual dollars.
The founders see it as a simple way of creating a predictive market, although that’s not their goal. Even though free systems don’t motivate users with enough of an upside to be consistently accurate in aggregate, some free systems have discovered very successful individuals. Money-free PicksPal was able to beat the Vegas spread for sports, but probably serves as a proxy for a lot of the real sports gambling happening offline. Social stock picking startups are another category trying to create a predictive market based off of their users. Social Picks, MarketWatch, and the Motley Fool CAPS service are some of the sites taking this on without real money. Covestor is another social stock site that ties investments to your real account.