[wpietri]

This is specifically why when we set up http://longbets.org/ we made is so the money always goes to charity. It's also why the Iowa Election Markets got a special waiver to operate. Either they're a market or a gambling operation, and both are heavily regulated in the US.

As far as I'm concerned you should have no more sympathy for them than anybody else. Even if this risk really never crossed their minds, their lawyer should have warned them of how problematic this was during their first five minutes in the law office.