November 27, 2012

"Intrade Closes To U.S. Bettors, Bowing To Pressure From Regulators."

Legal hassles thwart a guilty pleasure.
“It is against the law to solicit U.S. persons to buy and sell commodity options, even if they are called ‘prediction’ contracts, unless they are listed for trading and traded on a CFTC-registered exchange or unless legally exempt,” said David Meister, director of the regulator’s enforcement division. The restrictions Intrade and TEN are accused with violating “enable the CFTC to police market activity and protect market integrity,” he added.
Got that? I notice "unless legally exempt." How about legally exempting it then?

19 comments:

Ignorance is Bliss said...

It is against the law to solicit U.S. persons to buy and sell commodity options...

Exactly what commodity are you purchasing an option on?

SteveR said...

Intrade has been around what three or four months? They got right on that.

edutcher said...

It was goring somebody's ox.

Be interesting to see whose and how.

Could this have anything to do with the recent electoral sweepstakes?

David said...

Meanwhile . . .

Oh, never mind.

Nichevo said...

Since a political concept like Intrade exists to be rigged, I commend the CFTC for taking it seriously, which will probably obviate its usefulness. Why the hell should it be exempt?

Hagar said...

Whatever is not permmitted is forbidden.

McTriumph said...

Would it been shut down months ago had it shown Obama losing the election?

tim maguire said...

No, exempting them is not acceptable. To ask for an exemption is to recognize CFTC authority over online betting. From a business standpoint, of course, InTrade probably should ask for an exemption and, failing that, seek to comply.

But as an American, my preference is for the CFTC to back off (or, even better still, be compelled to back off) the mission creep.

elkh1 said...

"legally exempt": pay up : a huge fee for license: huger taxes for profits: Uncle Sam is deperate for money.

Next up: legalize prostitution for the taxman.

Bob Ellison said...

Fine by me. I lost my stake betting against Obama's re-election.

Kevin said...

I agree with the election comment, Intrade was a critical instrument in convincing the public of the inevitability of The Boy King II. "I question the timing" -- a lot.

Sigivald said...

Stever: Three or four months?

Since 1999, in fact.

(Per our host's question, the obvious reason why "they don't just legally exempt them" would be "because the exemptions are codified in the law, and none of them apply", I imagine.

Just guessing, but that's how "exempt" works in the majority of places I've seen "unless legally exempt" or similar language.)

gregq said...

When InTrade switched from taking a commission on contracts, to charging a monthly fee, they became a far less worthwhile service. Like the Iran - Iraq war, I'd like to see both sides lose. But I'll settle for seeing InTrade lose.

Smilin' Jack said...

How about legally exempting it then?

No. No "U.S person" should be allowed to buy or sell anything without government oversight and approval. Freedom is slavery.

PETER V. BELLA said...

In Chicago we have illegal gambling too. They are the parking boxes, the red light cameras, and the new speeding cameras that will be installed. The city rakes in the dough from suckers who gamble every time they get behind the wheel of a car. No one from the feds will ban these gambling devices.

sean said...

Does Prof. Althouse have some legal position here? I.e., some theory of what contracts should be exempt from CFTC regulation? Is that theory based on some systematic study or knowledge of the futures market? If so, I would love to hear it. If it's just a claim that Prof. Althouse should generally be the arbiter what is legal, then I am not persuaded.

Chip S. said...

Does the CFTC go after Vegas bookmakers next?

Roux said...

This is just the beginning... Obama takes control of everything.

McTriumph said...

CFTC is all over a little company like In-Trade / BAN that evidently hasn't had any trader complaints, but they completely missed Corzine's MFGlobal massive theft. It's who you know.