Jordan’s shoppers sitting pretty if Sox win

Thousands of Red Sox fans could be sitting in free seats soon – if their team wins the World Series.

Jordan’s Furniture, the Warren Buffett-owned local chain famous for commercials featuring brothers Barry and Eliot Tatelman, earlier this year promised free furniture – including sofas, dining tables, beds, and mattresses – to customers who bought between March 7 and April 16, so long as the Sox win the fall classic. Now, there’s a real possibility that Jordan’s could be paying back millions to customers.

“Imagine yourself sitting on that sofa, watching that game, and knowing it’s free if they win,” said president and chief executive Eliot Tatelman, who is already appearing in new commercials reminding fans of his commitment to pay them back.

He wouldn’t disclose how much Jordan’s might have to pay out, but the money won’t come out of Jordan’s bank account: Tatelman bought an insurance policy to cover any losses in the event the Sox win the title.

Still, Tatelman said the chain took almost 30,000 orders during the contest. One customer stands to get back $40,000, Tatelman said.

“He did his whole house,” he said.”

Now, I’ve got no desire to get these guys in trouble (even if their commercials were pretty annoying when I lived in Boston), but it’s interesting to note that since the Sox were about a 10 percent shot to win the series at the start of the season, the guy who paid $40,000 was really paying $36,000 for furniture and putting $4,000 on the Sox. If this one gets the nod, expect to see more of these promotions.

Dear HedgeStreet Member,

At the HedgeStreet Exchange, we are making some very important changes. We are beginning the process of modifying our trading and exchange businesses in order to better serve our customers and offer new and exciting products on the exchange. While we make these changes, we will temporarily suspend binary options and futures trading on HedgeStreet, starting October 1st, 2007. As a result, we will return to you the balance in your trading account during the first week of October. If you have a bank account on record with HedgeStreet for electronic funding, your funds will be returned electronically. All other members will have their funds returned via a paper check sent by mail.

We invite you to visit our Mock Trader site as we will continue to offer our current products for mock trading and will begin to trade some of the newer products we plan to launch on the HedgeStreet Exchange. We will, of course, advise all of our members of our changes and the resumption of trading on HedgeStreet. We greatly appreciate your business and hope the HedgeStreet Exchange can meet your trading needs in the future.

If you have any questions, please contact us or call us at 1-877-TO HEDGE.

Sincerely,

Richard G. Couch
CEO and President, The HedgeStreet Exchange

Futures and options trading involve risk, which may result in financial loss, and is not suitable for everyone. Past performance is not indicative of future performance or success. Any trading decisions that you may make are solely your responsibility. The trading revenue results and other information represented on this page are for informational purposes only and are not guaranteed in any way. The contents on this page are not an offer, or a solicitation of an offer, to buy or sell any particular financial instrument from HedgeStreet. The opinions expressed on this page are those of individual members of HedgeStreet and not necessarily those of HedgeStreet or any other third party.

NEXT: Is it the end for US-based betting exchange HedgeStreet?

Mike Arrington takes a US-centric view that, because internet betting and gambling is forbidden in the U.S., and because the multinational Internet firm Yahoo! originates from the U.S., then the British users of Yahoo! U.K. & Ireland should be barred from playing poker online with Yahoo!. Makes no sense at all, since Mike Arrington also reports that American residents connecting from the U.S.A. are indeed prevented from paying the online game.

–> Michael Arrington has a screw lose. Judge by yourself:

Yahoo! has launched a new “for cash” poker website on their UK & Ireland property. Users can play against others via a Flash interface, and are offered $1,000 in credit when they make their first deposit into the account. Registration is allowed from most countries, although the U.S. and Gibraltar, where online gambling are prohibited, are blocked (I tried). The service is provided through a partner, St Minver, but the game play occurs on the Yahoo! site. The introductory video says “Congratulations on choosing Yahoo! Poker,use your skills and try your luck at winning the pot.” Players have maximum loss limits – they cannot withdraw more than GBP1000 from their bank account every ten days. In 2004, Yahoo! and Google announced that they were removing gambling advertising from their sites. This launch seems to contradict their position on Internet gambling. [*] This is an extremely controversial move, and one that Yahoo! may not be equipped to handle. Yahoo! does provide a “responsible gaming” tutorial, but the Press will be quick to jump on any tales of woe from players who’ve lost a lot of money from the site. Broken marriages and lost homes will only make the stories juicer. [Punctuation slightly edited.]

[*] The contradiction is brewed by Mike Arrington’s hyper fertile imagination, only.

Should Americans tell the other world’s citizens (in Ireland) and “subjects” (in Great Britain) what should or should not make it in their merchant economy? Go fugging yourself, Mike Arrington!!!

Gambling Regulation & Enforcement Act 2007

LICENSE REQUIREMENTS
No applicant would receive a license unless the following requirements with respect to any Internet bet or wager, at a minimum, are met:
- Safeguards to ensure the individual placing the bet or wager is 18 years of age or older
- Safeguards to combat fraud and money laundering and compulsive gambling
- Mechanisms to ensure all appropriate taxes and fees are collected from individuals and the licensees
- Safeguards to ensure that the individual placing the bet or wager is physically located in a jurisdiction that permits that form of Internet gambling
LICENSING SAFEGUARDS
Applicants for a license would be required to provide comprehensive financial statements and corporate structure documents, and to agree to be subject to U.S. jurisdiction and all applicable laws related to Internet gambling. No license would be granted to any applicant convicted of a criminal violation of any law relating to gambling, money laundering, fraud or other financial laws. Licensing would be handled by the U.S. Treasury through its anti-money laundering agency, the Financial Crimes Enforcement Network (FinCEN).
CONSUMER SAFETY
The framework set forth in the bill would for the first time effectively regulate Internet gambling, thus making it possible to address underage and compulsive gambling, neither of which are prevented under prohibition regimes. Regulation combined with proven technology would establish a system of effective controls to block children and compulsive gamblers from gambling.
Underage Internet Gambling
Existing technology can enforce requirements that licensed Internet gambling operators restrict minors’ access to Internet gambling. For example, when registering at a gambling site, the customer would be required to provide a range of information including name, address, date of birth, telephone number and details of an identity document, such as a driver’s license or social security number. This information would then be passed on to the Payment Service Provider (PSP) and run through the Know Your Customer (KYC) system to confirm that the data being provided matches against several separate sources of information and is in fact accurate. The operators may also have KYC systems in place.
Operators could also request a physical copy of documentation, such as a utility bill and/or a copy of the customer’s identity document, for further verification.
Compulsive gambling There are a number of techniques that can be used, from systems that limit the total amount of funds that may be wagered based on credit limits, to the use of public databases that include details used to identify persons who have chosen to exclude themselves from online gambling. Customers could be added to this list at their own request.
Additionally, limits can be placed on the number of transactions a customer can put through on a daily, weekly and monthly basis, by the operator acting alone, by the credit card company, by the PSP, or by all three. In the event that an unusual spending pattern is noticed, these transactions could automatically be put on hold for further investigation.
FINANCIAL INTEGRITY OF INTERNET GAMBLING TRANSACTIONS
Money Laundering and Fraud
Funds entering a gambling operator’s system are already resident in the banking network somewhere. That is, the funds have previously been deposited into a bank account at some stage, subjected to stringent KYC requirements, and which greatly increases the traceability of any funds entering the system. All transactions can also be checked at the time of authorization against a number of anti-fraud, money laundering and terrorism databases.
Merchant fraud
Payment Service Providers could set-up escrow accounts for each licensee in which money is set aside for a period of time to ensure that when a financial transaction is successfully contested the operator immediately refunds the consumer. Therefore, any claim regarding the use of an unauthorized credit card could automatically result in a full repayment to the principal credit card holder.
STATES AND INDIAN TRIBES
To protect States’ and Indian tribes’ rights to control gambling activities within their respective geographic borders, the Act permits States and Indian tribes either to prohibit Internet gambling activities or impose limits on various types of Internet gambling activities.
Is it possible for restrictions to be enforced if individual states decide to “opt-out” from permitting persons in their states from Internet gambling?
In using the Internet, a customer’s IP address is broadcast to the operator, which can then be used to identify the state in which a customer resides with a 99 percent level of accuracy. This information is also made available and compared to the customer’s registration information. In the event the information differs, the transaction is not approved and the customer is prevented from engaging in Internet gambling.
SPORTS BETTING
Professional Sports Leagues opt-out
Under the proposed legislation, all licensed Internet gambling operators would be prohibited from accepting bets or wagers on sports leagues or associations that have opted-out. In the event of a violation, the operator’s license could be withdrawn and the operator may be prohibited from applying for a new license. As part of its contract with the Internet gambling operator, the PSP would be required to enforce these requirements throughout the collection and payment process.

External Link: AP

TradeSports, is a sports betting exchange incorporated in the Netherlands Antilles. Member funds are held in segregated bank accounts.

Familiar with online betting exchanges, wagering on sports, sports gambling, or even political betting? Copyright © 2007, TradeSports.com

The “About TradeSports” page:

[...] TradeSports.com is owned and operated by Trade Exchange Network Limited an Irish incorporated company. Members funds are held in segregated accounts separate from the Company’s own capital. [...]

Are the “members funds” still held in an Irish bank account or have they moved that to The Netherlands Antilles, too? Mystery.

As long as there is prohibition against sports betting/speculating in America, we will have to deal with untrustworthy, offshore betting exchange companies like TradeSports (the sister company of InTrade), incorporated in a place that lives off drug trafficking and money laundering.

For most people (even the libertarian-leaning type, like me), it’s a big no-no.

Previous: TradeSports is in good company in The Netherlands Antilles. + What does the TradeSports/InTrade “split” really amount to? – by Deep Throat

Previous: Why Prohibitions on Internet Gambling Won’t Work. – by prawf Koleman Strumpf

Previous: A Big Trader’s Open Letter to TradeSports-InTrade – by Todd Griepenburg

Anyway;

From the Tradesports forums:

Focus: United States

The Times – January 17, 2007

Neteller founders charged after sting operation by FBI
James Doran in New York

Stephen Lawrence and John Lefebvre, founders of Neteller, the UK-listed online payments company, were last night charged with conspiracy in connection with a multibillion-dollar money laundering scheme linked to internet gambling. ["a multibillion-dollar money laundering scheme"... no f***ing shame]

The pair were arrested on Monday after an FBI sting operation discovered that Neteller was being used to allow Americans to place illegal bets on sporting events via internet gambling companies based in foreign countries.

Mr Lawrence, 46, who lives in a luxury home on Paradise Island in The Bahamas, was arrested in the United States Virgin Islands and has been ordered to appear later today in the federal court of St Thomas.

Mr Lefebvre, 55, was arrested at the same time in Malibu, California, and was expected to appear in Los Angeles federal Court last night. [You were about to feel sorry for them, too, weren't you? Then you learned they were rich. I doubt they will be by the time the FBI has gotten its tribute, but you still can't feel sorry for them, right?]

Neither Mr Lawrence nor Mr Lefebvre were available to comment in response to the allegations made in the indictment. If found guilty, the pair face 20 years in jail.

The seven-page indictment, filed in New York last night, claims that the pair set up Neteller in 1999 with the express purpose of providing online payment services to gambling companies. The indictment also claims that between 2000 and 2003 Neteller Inc, a Canadian corporation, offered payment services to various internet gambling companies so that they could illegally access customers in the United States.

From 2004 to the present day, the same operation was conducted by Neteller plc, an Isle of Man-based company which in April 2004 raised some $70 million via a listing on London’s AIM. An agent with the FBI named in the indictment claims she used Neteller as a middle man between her US-based bank account and an offshore internet gambling company.

Shares of Neteller were suspended on AIM yesterday before the indictment was released as the company was seeking clarification of its status with US authorities.

A spokesman for Neteller stressed that the founders were no longer employees or directors of the company. “Because of that, this arrest has nothing to do with the company,” he added.

Mr Lawrence resigned as a non-executive director of the company on October 13, having stepped down as non-executive chairman last May. Mr Lefebvre resigned as a non-executive director on December 15, 2005. However, the pair still own large stakes of Neteller. Mr Lawrence holds 5.91 per cent of the company, while Mr Lefebvre owns 5.54 per cent.

Neteller claims to operate the largest independent online money transfer business in the world with 3 million customers in 160 countries and over $7 billion in annual transactions.

It specialises in providing instant payment services where money transfer is difficult or risky because of issues of identity, trust, currency exchange, or distance. In the past, it handled funds for online gamblers in the US but it is said to have stopped the practice when tough new laws banned internet gambling in America last October.

Last year authorities arrested a number of prominent executives for breaching US gambling laws, including two from Britain. David Carruthers, the former chief executive of BetOnSports, was arrested in July while Peter Dicks, former non-executive chairman of Sportingbet, was arrested in September.

Tradesports’ just-completed reorganization will probably buy a little time, but serious damage has already been done on all fronts. Some liquidity will be permanently lost just because of the NETeller incident, and it won’t be back anytime soon. Mssrs. Lawrence and Lefebvre will have to fork over some millions of dollars, joining the ranks of David Carruthers, Peter Dicks, Manfred Bottner, Norbert Teufelberger and others who inadvertently threatened America’s most powerful lobby, the casino industry. Sure, millions of dollars’ legal fees and settlement fees later, a court will do justice and toss out the indictment. But the damage will have been done, and the message will have been sent: The United States of America does not respect your person, your innovation or your property. Do not cross the casino industry. They are too powerful. And if you cross them, they will destroy you.

(Non-American readers, please do not fall back onto the puritanical-American stereotype as explanation for this. There was simply no demand for this legislation from any corner of American society, other than the casino lobby. Which was why Senator Jon Kyl, Senator John Ensign, and Rep. Jim Leach among others had to insert it as a rider into a port-security bill in the dead of night for it to pass. This episode is a grotesque embarrassment to the country.)
I think this was why Tradesports split into two sections, the one section dealing with all securities that compete with what American casinos offer, and the other offering more obviously “socially beneficial” contracts. However, while this does superficially help reassure Americans who might have money in Intrade, I don’t see how it really helps. If the feds pressure Delaney enough, Delaney has to choose between his professional reputation, and being able to ever set foot in the United States again for fear of getting cuffed and hauled off to a cell next to Carruthers et al. (I hope Delaney has wired every dime he can out of the United States before the government tries to freeze his US assets to use as leverage against him.)

Addendum: I hope Paul Tetlock, Justin Wolfers, and others who have made a mini-career mining the insights of prediction markets are as fine with the decimation of said markets as their complacency would otherwise suggest. The only way this will stop is if 1) the government issues a statement that prediction markets will be exempt from the intended swathe of destruction; and/or 2) respected intellectuals publish op-eds, lean on influential people, and otherwise pour negative publicity on the regulators and officials who have been doing this. Regulators’ career advancements are significantly governed by the political price of elevating them, i.e. if they cause more negative publicity, that will hurt their career prospects. Potential further victims of that bullying, including most of us, need to be just as ruthless about destroying reputations as they have. Just my personal — not general to MidasOracle — reckless 2c, because that really needed to be said.)

I am sure Tradesports/Intrade is bitterly learning that you can never pay somebody off once (their first time was the $150,000 CFTC fine, for violating the oligopoly of American commodities exchanges and running an oil futures market). You either refuse to pay at the outset, or pay over… and over… and over again.

(Originally posted at the Tradesports Political Maven)

PS — as a frequent contributor here, I know that there are some very disparate opinions of John Delaney and his enterprise. I have not held back from broadsiding Tradesports in the past, but I also feel compelled to say that, in light of the pall cast over Tradesports/Intrade’s future, I think Mr. Delaney’s decision to hold up the integrity of his enterprise, even at the cost of not being able to come to the United States again, is worthy of enormous respect. I have a lot of issues with the way Tradesports does certain things, but that is for another time. The current chaos does not have me wondering “What the hell is wrong with Tradesports?” just yet.

–Alex Forshaw

Q1 Will we have the option of where we want our money to go? I trade financials and sports but would choose to have my funds moved to the financial site.

A1 Yes. You can dictate where you want your funds to go.

Q2 Would Tradesports have a method of funding the accounts that didn’t involve the word sports?? ie: Now when we send a check or wire we send it to Trade Exchange Networks, which doesn’t set off any red flags. Would there be some sort of initials that could be used instead of the word sports?

A2 The “pay to” and “receive from” names will be “generic” we hope.

Q3 In actuality is this the method of eliminating US customers from sports trading, but still allowing them to trade non-sporting events?

A3 Absolutely not. From that perspective it is business as normal. US residents can still trade sports as before with www.tradesports.com

Q4 Will there be a way of easily transferring funds between In-Trade and Tradesports that didn’t involve Neteller or some other intermediary??

A4 It will be easy to transfer funds from TradeSports to intrade.

—

Addendum: One trader expresses his fear…

And I must say, a generic name for TradeSports is a MUST. I will do NO bank wires or checks to a company with the name ‘Sports’. I have no way to deposit to some of my other accounts because of this. I’m not looking for the government to be looking at my bank account.