Honour System Makes Betcha Legal In U.S.?

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Does being allowed to welch on a bet make this "not gambling?"

Intriguing story of the week comes from a new online betting site called Betcha.com, which boasts that it is "the world's first honor-based betting platform," providing a P2P community for bettors who like the idea of "gentlemen's bets."

The site has the feel of a betting exchange, where members can bet on anything at all against each other, negotiate and counter-offer odds with potential betting partners and at the end of the day [hopefully] settle the resulting bets honourably. A pool system is also available for members who prefer the bet without all the peripheral activity.

The operators of the site claim that the smart aspect of their concept is that it is - in their opinion - free of the danger of prosecution under American gambling laws.  Their grounds for this belief?  Betcha involves betting on an honour basis - bettors who meet their obligations build individual reputations called "Honour Ratings", and those that don't are unlikely to be tolerated for long.

The operators claim this is similar to a combination of "...an auction site, Las Vegas, a marketplace of ideas, and The Golden Rule - all rolled into one."

Betcha.com claims US legal compliance on the basis that bettors can welch on their bets, implying that this is not "gambling" and that members are to an extent safeguarded by the ranking system - not dissimilar to eBay. The site blurb explains, too that the risk element is not present: "Betcha bettors always retain the right to withdraw their bets and, for up to three days, not pay their losses. (Try that at a casino.) Therefore, they are not "risking" anything. No "risk" means no "gamble."

Under the sub-title "Is this Legal" the site has this to say:

"Yes. There are at least five reasons why the Betcha Platform falls outside legal prohibitions against gambling. While most of them are technical legalese, one isn't - it isn't "gambling." Although there are a few variations in syntax depending on the jurisdiction, the legal (and common sense) definition of "gambling," at bottom, requires that you (1) risk (2) something of value (3) on the result of a future event beyond your control. Betting that doesn't have all of these elements may be betting, but it isn't "gambling" and, therefore, isn't illegal."

It goes on to give an example:  "You are already familiar with some betting that isn't gambling. For example, if you run a race against a friend for $100, you control the outcome, so while you're betting, you aren't gambling. (Element [3] is not met.) When you make a handshake gentlemen's bet for no money on a football game, you are betting, but not gambling, because nothing of value is at stake. (Element [2] is not met.)

The caveat is that this is the operator's opinion and nothing more: "Although we spent thousands of man hours analyzing this point and related ones....we are betting our very freedom that our analysis is spot on, it isn't as though some Almighty Power came down from the heavens and deemed us "legal." That's not the way the law works."

Never a truer word.

How do the operators profit?  The site charges a $5-$10 fee on every $100 bet.