Insider trading and Magic The Gathering

Later this year Magic is releasing Eternal Masters, a draftable format filled with non reserve list cards focusing on premodern sets. Soon after the confirmation there was buzz that at least one large unnamed card dealer had been given an advance look at the card list in order to help him maximize his profits on singles he is selling. Apparently this has happened before (there was a marked increase of sales of the Onslaught fetch lands prior to their being reprinted getting announced indicating people knew for sure it was coming). But the current accusations are all very vague and done anonymously so who knows if it is even fact.

Since there seems to be magic players here I was wondering what people thought.

When there’s money to be made, people will do unethical things. The information is valuable to vendors, so there’s money to be made by WotC employees or contractors to sell the info. Hopefully WotC will get to the bottom of it.

What gets me is that a vocal part of the community always said, “leaks aren’t bad for WotC, we should encourage more leakers,” and when this obvious and INEVITABLE other side of it becomes clearer, all of a sudden many of those same people who pooh poohed WotC’s views on leaks are now demanding they do something about it.

Amen. Asymmetric information is always bad for the people on the wrong side of the asymmetry.

A leak to the public isn’t harmful, if everyone gets the information at once. The problem comes when there’s a leak to a smaller set of people: What’s in the new set will affect the prices of cards in the old sets, and so someone with access to the information early could corner the market on cards that are soon going to rise in value.

Yes, but there’s no way to know who a leaker is going to release information to. That’s why leaks have to be investigated and discouraged.

I think there are a few different dynamics at play when most Magic players think about leaks.

Most players are excited to hear about new cards. And they don’t really care whether the info is sanctioned for release. There’s also more than a little bit of the “information wants to be free” internet ethos. So, from that perspective, people like leaks.

Obviously, that support is going to go away when (1), the leak isn’t public, meaning the average person doesn’t benefit from it, and (2), it’s used for profit.

The other issue that came up recently was the implication by Wizards, not that leaks should be investigated, but that all magic players had a positive duty to report possible leaks, under threat of banning. People obviously pushed back against that. Matt Sperling wrote a pretty good explanation here. Using the Organized Play arm to enforce their advertising strategy in a heavy-handed way is not likely to convince many people.

FWIW, this particular scandal seems to have been a hoax. One vendor was spreading rumors to try and get other vendors removed from event sites, and the whole thing spiraled out of control. The “confirmed list” of EMA floating around was definitely fake, considering it contained Cursed Scroll, which is on the Reserve List, and WotC has confirmed that not RL cards will be reprinted in EMA.

The bigger financial scandal related to Magic right now is people manipulating TCG-mid prices to unload cards on Pucatrade.

Pucatrade itself is arguably a larger scandal in the making.

What is pucatrade?

PucaTrade is a website whose stated and intended purpose is to reduce the hassles of trading in person where the parties can’t find enough stuff they want in each other’s collection.

You start off with points, approximating cents. Cards are listed on the site assigned a number of points, based on the aforementioned online price index. You look up a list of what cards other users of the site want, find someone who wants what you have, and send the card to them. When you do, the proper amount of points is taken out of that person’s account and put into escrow. When (s)he gets the card and is satisfied with its condition, (s)he releases the trade and you get the points. You can similarly get cards you want from other users.

At its best, the site allows you to get rid of stuff that’s hard to find interest in otherwise, and get cards you’re interested in that no one seems to have or want to trade.

There are controversies involved, as alluded to above, but I’ll let others explain those.