Prediction Market Site InTrade Bans US Customers 260
MyFirstNameIsPaul writes "In an announcement dated Monday, Nov 26, 2012, Dublin-based InTrade stated 'that due to legal and regulatory pressures, InTrade can no longer allow U.S. residents to participate in our real-money prediction markets.' The Washington Post reports that the Commodity Futures Trading Commission filed a complaint in federal court against InTrade for 'illegally facilitating bets on future economic data, the price of gold and even acts of war,' demonstrating just how far the long arm of U.S. law can reach."
Re:Hmmm ... (Score:5, Informative)
To put a finer point on this, Standardized derivative contracts that trade on an exchange are heavily regulated. Option and future markets tend to be abused by inside traders, fast talking high pressure brokers, etc.
Most derivative contracts (by notional amount), however, trade OTC and are lightly regulated. Think SWAPs, CDOs, etc. However, the traders are large companies which are heavily regulated and are (supposed) to have sophisticated risk and capital controls.
Re:Yes, a truly shocking abuse of gov't power. (Score:5, Informative)
"Err, with rare exceptions, most national laws apply to people (citizens, residents, and visitors) within the national borders, but don't apply to people currently residing or visiting a different country. As a quick example, it's illegal for U.S. citizens, residents, and visitors to possess marijuana while in the U.S., but it's not against U.S. law for them to possess marijuana while in the Netherlands..."
But the U.S. House of Representatives did pass a bill last year to reverse exactly that.
http://www.huffingtonpost.com/2011/10/06/us-drug-policy-war-congress_n_998993.html [huffingtonpost.com]
http://www.govtrack.us/congress/bills/112/hr313 [govtrack.us]
Re:Yes, a truly shocking abuse of gov't power. (Score:4, Informative)
This is not true in all cases anymore. The US recently passed laws banning 'sex tourism' which is the act of hiring certain classes of prostitutes while traveling abroad, even when engaging in those acts is legal in other states. The purpose of the law is to prevent US citizens from engaging in sexual acts with young children in foreign countries, even when such acts are legal in the country where the act occurred.
http://en.wikipedia.org/wiki/Sex_tourism#Child_sex_tourism [wikipedia.org]
http://en.wikipedia.org/wiki/PROTECT_Act_of_2003 [wikipedia.org]