Futures traders, who bet $22 million on the outcome of the U.S. presidential election and $4 million on the Superbowl, have wagered $510,000 on predicting the next pope in an event some say is too hard to call.
Dublin-based TradeExchange Network's TradeSports Web site has German cardinal Joseph Ratzinger, 78, as the favorite for election, followed by Nigeria's Francis Arinze, according to its Web site. Futures on the nationality of the next pope meanwhile favor an Italian.
Cardinals remain inside the Vatican today, signalling through white smoke from a chimney of the Sistine Chapel in Rome once a successor is chosen, or black smoke for a lack of consensus. The price of futures paying $10 if Ratzinger gets elected rose to $1.79 today from 68 cents after Pope John Paul II died April 2.
``This is a pure punt on a puff of smoke, so you won't get many trading the contract,'' said Matthew Cheung, a market analyst at Refco Inc. in London, the world's biggest privately held futures broker. ``They'll only bet on something where they think they've got an edge.''
TradeSports has taken at least $400 million on bets in the past year on events ranging from NFL football to the capture of al-Qaeda leader Osama bin Laden, said TradeExchange Chief Executive Officer John Delaney.
The secrecy that shrouds the election means traders lack the information they rely on to bet on events, said Mark Irvine, chief marketing officer at TradeSports.
`Tight knit'
``Papacy futures is one of those markets which is based on personal opinion or speculation rather than known facts,'' Irvine said. ``It's a very tight knit community that doesn't leak information.''
The 115 cardinals gathered at the Vatican will today cast votes for a second time in a process known as the conclave, continuing with successive polls until a two-thirds majority is reached. The Vatican requires forfeiture of laptops, mobile phones, electronic organizers and anything else capable of transmitting to the outside world.
When John Paul II was elected in 1978, he wasn't considered one of the favorites, known as papabiles, according to John Allen Jr., author of the book ``Conclave.''
Of the 51,203 contracts trading, two thirds are on the nationality of the pope. Traders are paying $3.29 to wager an Italian will be selected as the next pope, down from $3.66 on April 2, and $1.70 for a German, up from 60 cents, according to TradeSports Web site. The contracts expire April 30, paying nothing for a wrong bet.
More than half the voting cardinals are non-European, with almost 40 percent from Africa, Asia and Latin America, leading some traders to speculate against a European pope being elected.
``My pick is that it will go to the developing world, that's where the church is growing the fastest,'' said Bob Iaccino, a broker for Spike Trading Inc. in Chicago, and a ``recovering Catholic'' of Italian descent. He didn't buy any of the contracts. ``The whole Catholic church is shrouded in secrecy, so you can't see the flow of information; you have nothing to lean on.''