April 27, 2007 | SlateIn an article questioning the legality of political markets, it is noted that the markets began with the Iowa Electronic Markets at the UNIVERSITY OF IOWA: "Why is the IEM allowed to accept cash? The government has said it won't prosecute. The Iowa markets were started in 1988 as a teaching aid at the University of Iowa's Tippie business school to give students experience in a real futures marketplace. In 1993, the not-for-profit entity received a "no-action letter" from the Commodity Futures Trading Commission, which regulates certain markets associated with financial, commercial, or economic interests. CFTC staff said it would leave the IEM alone as long as it operates under certain stipulations-that it exists for academic purposes, doesn't engage in advertising, and administrators don't profit from it. No other political prediction market in the United States has gotten the same deal."
Contact: Forrest Nelson