Patent ID: 7302412

Claim:
A computer-implemented method of conducting an iterative betting process for investors, the computer having a betting exchange unit for performing the following steps: a) identifying an uncertain event having m potential outcomes O 1 , . . . , O m , where m≧2, and where the rate of return thereof is determined by market forces; b) initializing a first betting cycle; c) receiving bets B 1 , . . . , B m from the investors for O 1 , . . . , O m to accumulate an initial bet total B tot ; d) defining outcome share groups that correspond to O 1 , . . . , O m and issuing an equal number of outcome shares OS(1), . . . , OS(m) to each of the outcome share groups such that OS(1)= . . . =OS(m); e) assigning a share value SV to each of the outcome shares; f) assigning quote values Q 1 , . . . , Q m to each of the outcome shares such that Q 1 =(SV*B 1 )/B tot , . . . , Q m =(SV*B m )/B tot ; g) distributing the outcome shares to the investors; h) initializing a subsequent betting cycle; i) receiving incoming money IM(1), . . . , IM(m) corresponding to subsequent bets B 1′ , . . . , B m′ for O 1 , . . . , O m ; j) receiving numbers IS(1), . . . , IS(m) of incoming shares for outcomes O 1 , . . . , O m from one or more withdrawing investors; and k) re-assigning the quote values Q 1 , . . . , Q m to preserve an equal number of outstanding shares in outcomes O 1 , . . . , O m such that OS(1)−IS(1)= . . . =OS(m)−IS(m), wherein OS(i) are numbers of outcome shares for outcomes O 1 , . . . , O m newly issued during the subsequent betting cycle.