Intrade Online Prediction Betting Exchange Leaves US Market

Published Thursday, December 06, 2012 -

A recent article about prediction markets in Europe has brought to light the possibility of punting on things like whether the price of gold will reach $1800 by year end may become available in the USA with the use of Bitcoin currency.

Prediction markets have been subject to restrictions by the Securities and Exchange Commission on over-the-counter financial instruments, trading in the CFD market is not an option for U.S. residents.

The contract for difference is a contract between two parties stipulating that the seller will pay to the buyer the difference between the current value of an asset and its value at contract time. Alternatively, if the difference is negative, then the buyer pays instead to the seller. Utilizing leverage, CFDs are traded on margin without the need for ownership of the underlying asset and positions may be either long or short. Unlike futures contracts, CFDs have no fixed contract size or expiry date. This is very much like the betting exchange services offered by Gibraltar licensed Betfair.

The U.S. Commodity Futures Trading Commission issued a civil complaint against Dublin-based firm Intrade recently arguing it peddles off-exchange options. A day later Intrade stopped accepting U.S. customers and urged them to withdraw their money from the site. The company says, “in the near future we’ll announce plans for a new exchange model that will allow legal participation from all jurisdictions – including the U.S.”

Another option for those seeking this type of action is Bets of Bitcoin which focuses on financial privacy and anonymity so that it’s irrelevant where the customers are geographically located. Bets of Bitcoin differs from Intrade in several ways, most notably in the way that the instruments are constructed. Intrade offers a full trading platform so you can get in and out of positions even before the expiration date whereas Bets of Bitcoin offers an allocated payout of losing bets based on weighted time of entry and shares commission with the bet creator. Bitcoin again may have a place in the US online gambling market.

Related news

Return to Latest News