The US authorities move in to stop the Irish betting exchange Intrade. US customers are ordered to close their accountsNovember 27th, 2012
— Mike Smithson (@MSmithsonPB) November 27, 2012
Where now for the Dublin-based bookie?
As I’ve often remarked on PB I’ve found it odd that while Betfair has for years taken large measures to stop any US-based customers from accessing its site and trading on its market the Dublin firm, Intrade, has apparently operated with impunity.
During the recent White House race the firm became the main platform for US political gamblers and, indeed, its prices were reported on widely in the main-stream media. Like in 2004 and 2008 it became one of the main indicators.
Now the regulatory authorities have taken action and Intrade has been forced to email all its clients telling the that their accounts must be closed by December 23rd if they are US-based. Those punters, like myself, who are based outside the US can go on using the market as before but, I guess, there will be less liquidity.
There is no suggestion in the announcement from the U.S. Commodity Futures Trading Commission that anybody has been victimised or defrauded.
Interestingly they seem to have waited until the 2012 Presidential race was over before taking action.
It’s not for me to comment on the legalities involved but the action means that the one market that gave us a good barometer of US betting opinion will no longer have US punters.
During the recent White House race there was a marked different for long periods between the Intrade Romney price and the Betfair one with the GOP contender being favoured in the former. At times the percentage probability gap on the GOP contender between the two markets exceeded 10% opening up opportunities for arbitrage.
The fact that Romney seemed to be more favoured on the market with a largish US customer base always seemed significant if, in the end, it proved to be mis-guided.
What for Intrade now? It might be that it will make an effort to extend into the UK which would add to the competition for Betfair. Intrade has always been ready to handle innovative markets.
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