I earlier commented on Poolitics, a real-money, U.S. based prediction market. I noted, in particular, that the site said nothing about the legality of what it or its customers were doing. By way of follow-up, I wrote to Poolitics via the only contact info it offered: a generic messaging webform.
Some weeks later, Brett Michaelson, the owner and operator of Poolitics, replied to my query about the legality of his website. He helpfully offered a link to an archived video clip of a CNN Headline News segment. It shows Regina Lewis, CNN's "AOL Online Advisor," casually reporting on Poolitics' services and off-handed concluding, "Totally legal, by the way." See
CNN Headline News: Report of Regina Lewis, (CNN cable broadcast, July 10, 2004, 5:20 PT) (Realmedia clip offering the quote at 3:00 mark of clip).
That is not much by way of legal analysis, but it's about all we have, for now. I'm still corresponding with Michaelson, and hope to soon have a sense of how successful Poolitics has been. It certainly seems to have been active in recent weeks. I'm interested in the question because my draft paper, "The Prediction Exchange: Progress in Promoting the Sciences and Useful Arts," posits that legal uncertainty has stymied the development of real-money, U.S.-based, prediction markets. Maybe Poolitics, thanks the Michaelson's boldness, offers a counterexample.