> “The idea of a federal betting parlor on atrocities and terrorism is ridiculous and it’s grotesque,” said Sen. Ron Wyden, a Democrat from Oregon. The head of DARPA, Adm. John Poindexter, was forced to resign and the project was squelched.

How idiotic. It sound like a very good idea. Anyone with "insider knowledge" but no participation of a terrorist attack, will be very tempted to place a bet. By checking the bets you can avoid attacks. Create such a market using bitcoins, and you'll get very valuable intel. It's like having ears everywhere.