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Dublin, Ireland-based betting exchange Intrade is being sued by regulators and it's not all about the company's wagering services, the Wall Street Journal revealed on Monday.
With news of the lawsuit, Intrade announced it will no longer allow “real money” wagers from those living in the United States.
Intrade was widely cited by political pundits leading up to the early November US elections. The company, which targeted traders and was popular among Wall Street brokers, accepted “real money” bets from US citizens on current events and financials, however, it had long ceased taking sports wagers since the enactment of the Unlawful Internet Gaming Enforcement Act (UIGEA) in October 2006.
The Commodity Futures Trading Commission filed a civil complaint against Intrade and its parent company, Trade Exchange Network Limited, accusing the company of violating a ban on options trading and making false statements in official filings.
"We are sorry to announce that due to legal and regulatory pressures, Intrade can no longer allow U.S. residents to participate in our real-money prediction markets," Intrade said in a statement. "Unfortunately this means that all U.S. residents must begin the process of closing down their Intrade accounts."
The CFTC complaint is less concerned about actual wagering and more focused on Intrade’s alleged buying and selling of options contracts predicting the outcome of economic reports.
"It is against the law to solicit U.S. persons to buy and sell commodity options, even if they are called 'prediction' contracts, unless they are listed for trading and traded on a CFTC-registered exchange or unless legally exempt," said David Meister, director of the CFTC's division of enforcement, in a statement.
It was not immediately known what percentage of Intrade’s business consisted of US customers though it is widely believed this move will drastically alter the company’s bottom line.
Intrade began going downhill ever since its founder, John Delaney, died while scaling Mount Everest and coming within 50 yards of the summit of Mount Everest in May of last year. Delaney’s wife had given birth prematurely while Delaney attempted to realize his lifelong dream.
- Aaron Goldstein, Gambling911.com
