Fox News – The digital currency bitcoin — once used to facilitate online drug deals — now appears to be enabling people to get around regulations banning online betting.
Predictious.com, a new company from Ireland, offers a “prediction market” that allows people to bet on everything from the U.S. presidential election to the Olympics and the Oscars. And it’s all made possible by bitcoins.
Betting of this sort is a legal gray area in the U.S., where the federal Commodity Futures Trading Commission (CFTC) decided in a 2012 regulatory order not to allow prediction markets on the grounds that they are “contrary to the public interest.”
The CFTC recently sued the popular prediction market Intrade.com for operating without a license, which forced the site to shut down.
Predictious.com, which started last July, has the same model as Intrade – except that it accepts only bitcoins, allowing it to receive funds quickly from Americans despite regulations that forbid banks to transfer money to it.
Bitcoins are virtual currency unconnected to any country, unlike every other currency on earth. It has no physical form in paper or coin; instead computers “mine” bitcoins by generating new ones at specific durations and depositing them into virtual bank accounts.
While the CFTC forbids prediction markets that use cash, it is less certain that it will go after one that uses bitcoins.
“There is no way I can answer [that]. Too speculative for us,” CFTC spokesman Steven Adamske told FoxNews.com.
