The only problem is, courts could decline to judge a gentlemen's bet. However those who tried to hedge against pirate's default, and which Matt knew by his own admission, might claim damages by willfully leading them on. Who knows, maybe Matt tried to corner the debt market himself, which would lead this into outright fraud territority and liability.
IANAL
Yea, I suppose you are right. If a court would rule on such a bet, I still believe they would rule against MW...and I don't think it would be a difficult ruling for them to make. I learned the hard way in a contract dispute matter where I was the plaintiff and lost due to my ignorance in reading and fully understanding agreements and contracts, written or not.