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."
Yes, a truly shocking abuse of gov't power. (Score:4, Insightful)
"InTrade can no longer allow U.S. residents to participate in our real-money prediction markets"..."demonstrating just how far the long arm of U.S. law can reach"
US law being applied to US residents?! Outrageous!
How far is too far? (Score:4, Insightful)
Is the long arm of the law reaching too far? Sounds like a gambling company was operating in the US, or at least for US customers. Gambling is illegal (unless the government is in on it, a discussion for another day :) in the US. Therefore they filed a complaint. Sounds like everything is legit.
Another stupid summary (Score:3, Insightful)
Re:Hmmm ... (Score:5, Insightful)
The Feds' problem is that it's effectively a futures/options market in many respects, and such instruments are to be traded on regulated exchanges. Intrade is not so regulated, thus they are being excluded from the US market.
Re:USA citizens used to be first class (Score:5, Insightful)
Good riddance! (Score:5, Insightful)
I, for one, am very glad these unlicensed options traders are getting stamped out! There's no room in the economy for these shenanigans! Just think what could happen if people started massively trading options on unregulated exchanges - people would start speculating, maybe betting on, say, housing prices going up or down, and before you know it, we could have a housing assets bubble that would burst, bring down the economy and require massive government bailouts! I'm so glad that options trading is restricted only to regulated, licensed exchanges where such things couldn't ever happen......
The lesson here is this: if you're a small person trying to speculate - that's bad! If you're a giant investment bank trying to speculate - go right ahead, just as long as your dealer^H^H^H exchange is "regulated".
Re:How far is too far? (Score:5, Insightful)
Considering these facts, I'm not entirely comfortable with an unrelated country being able to have such an impact on a foreign company, which only operates overseas.
Try getting a brokerage account in the UK from USA (Score:4, Insightful)
Re:Yes, a truly shocking abuse of gov't power. (Score:5, Insightful)
No, US law is being applied to a non-US company because they offered services to US residents.
In a sane setup, the US regulators would go and prosecute US residents who used illegal services, not foreign companies with foreign owners who are not in US jurisdiction. However, prosecuting lots of ordinary Americans is not politically attractive to these sorts of regulatory bodies, so they try and impose US law on foreigners instead. Now maybe these InTrade employees will have to avoid ever flying near the USA again in case their plane is forced to land and they're arrested.
Re:USA citizens used to be first class (Score:3, Insightful)
I have said it and will say it again. You with your vote (or your non voting) got the people into Congress who limited your ability to bet on future events. Don't complain about the laws Congress makes!
Voting or not voting has nothing to do with complaining. At this point, we are too far gone for 'elections' to make any difference. Our freedom went out the window when we decided that 50+1 % can make law. That is called the tyranny of the majority. For some it takes away freedom to intrade, for others freedom to smoke pot, for some the ability to buy and sell raw milk, or sleep on a mattress without fire retardants, or continue to purchase incandescent light bulbs.
It is becoming more and more obvious that these restrictions are not for our own good, or even for the children. It is simply about control - getting millions of people to do or not do something at the will of our leaders. When we as people do that to animals, it is called a farm - and they are called cattle. What does that make you?
Re:Yes, a truly shocking abuse of gov't power. (Score:5, Insightful)
Re:Yes, a truly shocking abuse of gov't power. (Score:5, Insightful)
The US doesn't ban gambling, they protect the government's monopoly of it.
Re:USA citizens used to be first class (Score:5, Insightful)
Yes, that follows logically . . .
Re:Yes, a truly shocking abuse of gov't power. (Score:5, Insightful)
Since it's The Washington Post, they buried the lead at the very very end of TFA.
Monday's complaint includes charges that TEN violated that earlier settlement. The company used Intrade to offer illegal options including on the future prices of gold, changes in the unemployment rate and a measure of U.S. economic output, the complaint said. It said TEN failed to provide the pop-up notices mandated in the 2005 order.
Intertrade had already been charged with the exact same offense, had agreed to stop doing so, but didn't.
Somehow this is an issue with intrusive, authoritarian governments?
/And I don't think anyone is arguing that commodities futures should not be regulated, because they would be wrong.
Re:Yes, a truly shocking abuse of gov't power. (Score:4, Insightful)
Why the fuck would you "call that out", though? That's an absolutely stupid point to make. Of course US law is going to apply to people inside the US. Just like German law would apply to me if I went and visited Germany.
Re:How far is too far? (Score:4, Insightful)
Considering these facts,
Next time try reading to the end of TFA, where they mention that the Irish company, founded by an Irishman, with a HQ in Dublin, had settled the exact same charges (with the CFTC) in 2005.
Awkward.
Re:Good riddance! (Score:5, Insightful)
I'm perfectly fine with the taxes being paid on only the profit. I'm just wondering why the hell simply having money to invest is rewarded more than actually doing work. Capital gains should be taxed at the same rate as ordinary income, if not higher. There is no reason whatsoever that we should be rewarding people for simply having money.
Re:Yes, a truly shocking abuse of gov't power. (Score:4, Insightful)
Intertrade had already been charged with the exact same offense, had agreed to stop doing so, but didn't.
Somehow this is an issue with intrusive, authoritarian governments?
Yes, if the US government is attempting to extend it's legal jurisdiction to control what a sovereign foreign national or foreign business does in their own nation. Does Iran get to extradite and prosecute Hollywood film companies and/or their execs for depicting women not covered by hijabs and/or burqas?
/And I don't think anyone is arguing that commodities futures should not be regulated, because they would be wrong.
If by "regulation" you mean laws and regulations to prevent fraud/cheating/stealing and to enforce legal contracts and negate illegal or unconscionable contracts, then I agree.
If you mean the type of intrusive and byzantine laws and regulations that exist now that attempt to "shape" and "steer" the market according to some politician's or bureaucrat's fantasies, then I AM arguing against regulation, regardless of your opinions either way.
Strat
Re:Yes, a truly shocking abuse of gov't power. (Score:5, Insightful)
Yeah it can be really inconvenient to go after the people actually breaking the law. Let's just go after the convenient targets instead, because law enforcement is hard!
Re:USA citizens used to be first class (Score:1, Insightful)
Shut down the loopholes that people use to reduce their taxes and to avoid various regulations and laws and you will put the final, very tough nail into the America economy. The only reason that USA had an economy during the 40s and the 50s, when the nominal marginal tax rate as stupidly high, over 90% and later over 70% and such, was because there were plenty of ways not to pay the taxes.
Americans at the time when nominal taxes were high didn't pay any of those nominal taxes. They could deduct any of their losses from any of their gains dollar for dollar. You lost on house depreciation or on a stock deal or you lost on a casino bet, you just deducted it from wherever you profited, be it your salary or any type of investment. The businessmen of the time bought the most lavish things, bought memberships in the most exclusive clubs, had yachts and airplanes, all of those things were completely tax deductible.
Think about this: why would you NOT buy something expensive, you are getting it at a 91% discount! If your choices are: out of every 1000 bucks give 910 to the gov't and keep 90 OR spend the 1000 bucks and don't pay any taxes on it, what do you think people would do? Because after all, when they spent the 1000 bucks, it's as if they spent 90 bucks but got 1000 dollars worth of product for it.
So if a fancy chair costs 10,000USD and you could either give gov't 9,100 and keep 900 or buy that fancy chair, you bought the chair! You bought the chair for 10,000USD at the 91% discount, because otherwise you'd still only have 900 bucks in your pocket from that 10,000 and you couldn't buy a 10,000 dollar chair with 900 bucks.
The US economy of forties, fifties, sixties did well not because of ANYTHING that gov't did but very much despite of EVERYTHING that it did. The Japanese and the rest got a wind of that, the US economy was stagnating because of lack of investment and the Japanese were investing, and I am not talking about government.
The 91% income tax or 70% income tax or 50% income tax or any income taxes modify your behaviour. The higher the taxes are the less likely you are to invest.
Buffet again came out with a nonsense piece of propaganda, stating that investors don't care about taxes, if you see that you can make 10% in profit, but you'll be taxed at 91% of your gains, you'll still take the deal because you'll be ahead of fixed gov't income (which is nothing today).
That's a lot of hooey. There are no risk free investments. If you invest in something and even your odds of making 100% of money back is 50% chance, you are going to be very much wary of the tax situation.
Your loss is 100% of your investment (and that's after tax money) in case it goes sour. But your gain is 9% at 91% tax rate. Well, guess what, this means you are risking your investment too much. If you invest $100,000 (that's after tax money, because that's either your personal income or it's money that corporation records as profit, so that's already post-corporate and possibly post-personal income taxes), if you invest 100,000K and your chances of making 200,000K are 50/50, then at 91% tax rate what you are really saying that you have 50% chance of losing your money (gov't isn't going to backstop it for you, unless you are a big bank of-course, but big banks don't invest in private businesses anymore, they only launder Feds fake credit into gov't Treasuries).
So 50% chance of losing your 100,000K and 50% chance of making 9K. That's very stupid, you compare that to any other less risky thing you can do and you rather do that.
A more real world like situation is that your investment has less than 10% chance of success and 90% chance of failure. That's what happens to VCs in America, that's why they shut down, they expect stupid taxes and they figured out this simple math:
10 people come to you asking for investment money.
You give each one of them 100K for example, that's 1Million.
Now 9 of them lose your money, that's 900K out of the window. IF YOU ARE LUCKY 1 o
Re:Hmmm ... (Score:4, Insightful)
Re:USA citizens used to be first class (Score:1, Insightful)
Nobody should be paying any income taxes, but certainly the wealthy are paying a hugely disproportionate amount in income taxes, both as a percentage of their earnings and as an absolute dollar amount. 5% of top earners pay 59% of income taxes and 50% of bottom earners pay 3% of income taxes. This is a completely wrong system even before the argument that income taxes are wrong in the first place. Income tax assumes that your income belongs to the government, not to you, and the government allows you to keep a portion of it just to maximise its own revenue.
Obviously there is huge discrimination against the voting minority of the people, who are in the top earner bracket by the huge majority of the bottom earners, and it doesn't matter what the definition of 'rich' is, it is just somebody who is making more than you, that's all, because there is nothing that says: a person making 10 million per year is rich or a person making 1 million dollars a year is rich or a person making 150K per year is rich or a person making 70K per year is rich or a person making 45K per year is rich. This idea is arbitrary and the collectivist mind must keep it arbitrary so that it is easy to re-target the mob to whoever the current subset of the population is that is making more than you.
Your stance here shows exactly what the problem is:
Any "freedom" I can't have I have no trouble with the government keeping from your rich ass. ......
if I don't have that right, neither should you.
- that's it, that's the gist of it, that's the root of it, there is nothing else, only this. (of-course these rights are stolen from all individuals, not just from the very wealthy, the very wealthy trade on shadow markets regardless of such laws, the people who undoubtedly suffer from such laws are actually the people of more modest means)
If you personally cannot do something then it must not be something that anybody else can have a freedom to do even though they completely earned the ability, they must be prevented.
Here is how it can be extended:
"it doesn't matter what you make in earnings and how you achieved it, if I can't have a yacht, I have no problem with the gov't keeping it away from your rich ass"
"...if I can't have a nice car, I have no problem with the gov't keeping it away from your rich ass"
"...if I can't have a vacation, I have no problem with the gov't keeping it away from your rich ass"
"...if I can't have that certain food, I have no problem with the gov't keeping it away from your rich ass"
"...if I can't have good time with that beautiful super model, I have no problem with the gov't keeping it away from your rich ass"
"...if I can't have anything, I have no problem with the gov't keeping it away from your rich ass"
"...if I can't have more than 200K in earnings per year, I have no problem with the gov't keeping it away from your rich ass"
That's the problem, if the mob can prevent the wealthy from actually being able to use their wealth as they see fit, then there are no reasons to bother working. If Steve Jobs was limited to what he could make beyond a certain amount for example in the year 1985, when he was already a multi-millionaire, then he would stop working, go ahead and just enjoy the remaining years spending his wealth rather than re-investing it, rather than working, rather than creating all the products that he did, expanding the business as he did.
The wealthy enjoy only a tiny portion of their wealth actually, they spend on themselves a tiny amount. Jobs spent maybe 4% of his total earnings on himself over his life time, the rest was always invested and re-invested. It is those wealthy people who actually give the society much more than the society gives them and much more than the middle class and the poor do. The poor and the middle class only make enough to feed themselves, the wealthy generate businesses and products and services that feed millions of people, give