Tradesports separating current events/politics from sports betting

Mr.K · #1 01-23-2007, 01:09 AM

For those that understand these things better than I, can you explain if there was a specific motivation for Tradesports to separate its current events/politics wagering from its sports betting? All of the sports action remains on Tradesports, but the current events action is now on intrade.com.

From the standpoint of UIGEA compliance, I would have to think intrade's new exclusively current events/politics lineup is legal (though I'd want to go back and look at the definition of illegal gambling again and how the "subject to chance" clause works in there, since even politics outcomes are "subject to chance."). Can anyone with better knowledge of why this split happened and how it will impact the ability of U.S. users in the future comment? Many thanks!

Little_Luck · #2 01-23-2007, 02:35 AM

I am thinking the same way. They are trying to seperate the legal from quasi-legal. It's most likely some sort of branding to ensure that part of the business doesn't suffer in case the U.S. comes down on them. If they do, they will at least salvage the legit-end of the business on a seperate entity.

fnurt · #3 01-23-2007, 03:56 AM

Every US jurisdiction defines gambling differently. In some states, it has to be a game of chance. In other states, it's gambling as long as you're wagering on the actions of people outside your control, and so forth.

The motivation here likely has to do with federal law, since it's the feds who have been getting aggressive in this area. It's been settled for some time that the Wire Act prohibits sports gambling, although the present administration has been trying to apply it in other areas, as we all know. Still, there's ample justification for Tradesports' lawyers to advise them that sports betting is more clearly illegal under federal law than other types of bookmaking.

I don't know much about this situation, but it certainly sounds like this could be a prelude to cutting U.S. users off from one but not the other.

domer2 · #4 01-23-2007, 10:34 AM

Nothing to do with legality; mostly to do with mentions in the press (Wall Street Journal, CNBC, CNN etc.).

They also have a different fee structure in InTrade I believe, or at least plan to to have one.

On a financial level, if the spin off is successful, it allows a creation of two brands, which improves the value of the company.