As more prediction market enthusiasts in the U.S. reconcile themselves with eventual CFTC regulation, the Poker Players Alliance is making a bid to join the ranks of the privileged exemptions to UIGEA. Prediction markets have simply not been profitable enough to support a national lobby for a similar exemption. The CFTC route is cheaper and less controversial, though more restrictive.
Is there is room in the PPA’-s tent for prediction market interests? Probably not, but it is worth looking into, especially since they are characterizing their request as a “-skill game exemption”-.
If not, while I don’-t begrudge the PPA their relative progress, I would not be inclined to support their efforts to attain an exemption for the game. According to PPA President Michael Bocherek, “-While we are working toward the short-term goal of a poker exemption, the PPA will also be laying the foundation for the eventual U.S. regulation of online poker. This is the only proven public policy for online gaming.”-
Perhaps they ought to keep to their long-term goals, as in the short-term, poker is a game of chance.
You could say that these opinions are divisive, but I would counter that it’-s up to the PPA to determine how specific their interests are. The more they act like a privilege-seeking special interest, the more my general libertarian support for all forms of legal gaming is trumped.
[Cross-posted from Risk Markets and Politics]
Previous blog posts by Jason Ruspini:
- The CFTC safe-harbor option for event markets
- CFTC regulation and election contracts
- Asymmetry in Obama nomination market
- Prediction Markets: Powerful enough to be dangerous?
- 2009 tax futures yielding 1.5%
- Intrade, with carry
- Talking tax futures on BNN, Canada’s business channel
I think it is important to clarify something here.
The Department of Justice had made it clear that it still has within its sight any online gambling company that ever accepted a bet from a US citizen, every bank that has ever promoted or invested in a US-facing online gambling company, every bank or payment processor company that ever facilitated a financial transaction to a US-facing online gambling website, and every gambling portal that has ever advertised US-facing online gambling companies (Gambling 911, EOG etc….
In the event that online poker were to join the “ranks of the privileged exemptions to UIGEA” those companies that had previously taken Poker bets from US customers (and that includes Betfair and William Hill), would not be granted licences. This would of course then leave the door open to the big Vegas casinos. (In my opinion this is what the UIGEA is really about – getting rid of the bad apples, before eventual legalisation).
The same is true for prediction market companies …those that have already broken the law, will not be allowed to benefit from any exemption; were there ever to be one.
A catch 22 you may say, and you would indeed be right……..
I have read the text, following the link given by Jason Ruspini, and if the US Congress says that Poker is a “game of skill” [??], then prediction markets should be exempted too.
http://www.gambling911.com/Onl…..12407.html
(((The real issue is not “game of skill” versus “game of chance”. The real issue is individual freedom and the protection of minors and addicts.)))
Umm, Mr. O’Connor… what exactly is a “bad apple” if it’s not a special interest that uses public goods to bludgeon competition out of business?
Can the PPA win? How long do you think before the law is scraped?
Intrade traders seem to think this will happen by the end of 2010. I am and have been much more interested in CFTC policy.