American betting exchange craps out after four months
Louisiana busts lead to Washington lawsuit
The state of Louisiana has apparently had enough of Betcha.com, a peer-to-peer betting exchange similar to Intrade or Betfair but based in Seattle, the Seattle Times reports.
The raid on the company's offices was conducted by Washington authorities at the behest of the state of Louisiana after law enforcement officers there placed bets on the site and issued arrest warrants for Nicholas Jenkins, Josie Imlay, and Peter Abrahamsen for illegal gambling by computer.
Betting exchanges function like futures exchanges in the commodities markets, although the bets tend to focus on sports and current events rather than commodities prices. The US government even had one of its own at one time: the controversial "terror casino" that went down in flames of congressional anger.
Betting exchanges provide an electronic platform for individuals to wager with each other, rather than banking games like a traditional casino, and exist in a kind of legal limbo in states where wagering between individuals is not against the law.
Dublin-based Intrade, for example, takes wagers from Americans, and even has ties to the American government and academics studying gambling markets. Betfair, on the other hand, has been more conservative, and does not take action from American players.
Exchanges typically charge a transaction fee like a stock exchange or futures market rather than take a percentage of the wager, to avoid being classed as a casino. Whether this distinction is sufficient to placate American authorities remains to be seen.
No federal charges appear to be pending against the company, and the state of Louisiana has been aggressive in the past against internet gambling operations, so this could turn out to be an isolated incident.
The defendants have responded with a lawsuit against the state of Washington for its role in raiding their offices and confiscating their equipment and servers. If the futures exchanges are as accurate as their advocates believe, maybe they can give us some good odds on the outcome of that claim. ®
Burke Hansen, attorney at large, heads a San Francisco law office
On the wisdom of crowds
In accordance with the principles of doublethink, it does not matter if the futures are accurate, or when it is, or that determination of the future is not possible, the futures are meant to be continuous. The essential act of futures markets is the destruction of the produce of human labor.