> [Edit: imagine two bookies, both of them placing odds on different horses. how, exactly, are you going to figure out which bookie to bet with in order to get the fairest odds?]
Isn't that type of problem solved through arbitrage? Frankly, I'm really not sure I get your point.
Arbitrage generally requires with equivalent commodities traded on different exchanges. It doesn't work when everything is different from everything else.
In other words, arbitrage would only work if the bookies showed odds for the equivalent horses. But in this scenario they don't. (also see my most recently posted comment)
Isn't that type of problem solved through arbitrage? Frankly, I'm really not sure I get your point.