3 ms·

Sure, but is betfair a scam too? Or what about an OTC desk? Both of these are similar to bucket shops wrt who's the CP.

• Animats 5y ago
  Market makers in the US are required to have enough capital of their own so that they don't default on their obligations.[1] This requires substantial assets. All countries with significant international market making activity have similar requirements. Institutions will not trade with parties that don't have that kind of backup. US market makers have to settle and pay within three days. (Was that changed to two days?) Missing that deadline is a huge event and puts a market maker out of business within hours. See Bear Sterns, although that was a slightly different situation. Because the business does not allow long-term outstanding balances, it doesn't lend itself to scams. British bookmakers are highly regulated. "UK licensed operators are required to hold customer deposits and stakes in ring fenced independent accounts in case they do fail". The binary options business thrived in the UK for a while because they were considered gambling by the financial regulator and a financial product by the gambling regulator. That ended in April 2018, when they were banned. [1] https://www.law.cornell.edu/cfr/text/17/240.15c3-1 https://www.law.cornell.edu/cfr/text/17/240.15c3-1