I'm not sure specifically about the moral crusade against Kalshi and Polymarket, but I am glad to see that at least one state is serious about its sovereignty and is willing to go to the mat with criminal charges. Utah 100% has a right to enforce this and I hope they are successful. And taking on the feds too, that is a gutsy move.
We need at least one state to do this when large corporations violate privacy laws.
Polymarket and Kalshi also fuel very immoral and criminal behaviour's and make the very worst in people come to surface. It's amplifying only the worst in humanity!
I have heard and seen: Bet's on the live & fate of a celebrity, person, company, country, weather etc.. It's getting absurdly criminal. You've seen the guy in France burning a weather-sensor, just so he wins a bet. The soldier's knowing their mission and "secretly" betting on the death of their enemies. This is getting beyond dark and unethical. It's maximally anti-social and destructive for humanity.
If Polymarket/Kalshi and co. continue roaming free, we'll eventually see parts of humanity circling a death spiral like ants do.
> not sure specifically about the moral crusade against Kalshi and Polymarket
We're feeling the effects of broad-spectrum gambling addiction. It's hitting our kids. It's hitting our young men. It's hitting our elderly. Restrictions on social media, regulation around gambling and folks trying to drink less are all, it seems, part of a common theme.
Yeah I agree with the profound harms; it's just that they need to be weighed against the benefits that come from these markets. The ability to predict, hedge, etc. Of course sports contracts are a pure social loss. But when regulators get in the business of deciding what is a worthwhile contract, there is a risk of throwing the baby out with the bathwater. So "I'm not sure" doesn't mean I'm against, it means I am kind of torn between these two things.
If a non-gambler has investments in gambling companies (say, VTI which contains multiple comparables to Polymarket/Kalshi), then they profit. I literally make money off those who cant help themselves, every day.
They do. At massive cost. Nate Silver’s election model was in close agreement with prediction markets this year. And the vast majority of Kalshi is not “prediction markets for elections”. They serve ads targeted at idiots. Like “make money betting on the weather”. I know because I’m one of the idiots they target. They are a deeply slimy company.
That sounds more like prediction markets tending to blindly follow more credible sources of information. Wisdom of the crowds doesn't really provide added value if it's based on a bunch of uninformed gamblers refreshing the same four websites.
Kalshi had Abbot solidly in the lead (polls were closer to final accuracy) until the minute enough votes came in for news orgs' forecasting models to tip the race to Lean D, and then plummeted to 0%.
On balance it seems like they provide little to no uniquely valuable information for anything that matters.
Gambling is an inherently unproductive parasitic thing that people can get addicted to and destroy their own lives and the lives of their family members.
I have the boldness to say letting these companies mainline gambling into every vein of culture, including those heavily sampled by children is a terrible idea and they should be routed.
I don't think it takes much boldness, so my condolences to anyone who needs to hem and haw over that decision.
It does raise the question, is waiting for the full picture when the full picture is ruining more lives for not much gain at all to anyone really a good idea?
Your characterization here is adding context that wasn’t actually present in what was said, just like the two posters before you. Your morality is leaking into your objectiveness. That’s bad because morality without truth can lead to bad results even within the same systems of morality. The OP reached the same ultimate conclusion through different means. Why is your boldness necessary?
As to your general point, I agree. We must be bold and say the right words online lest a stranger think we are terrible people because we choose our words to mean things instead of to signal our morality.
Is my comment adding characterization you were unfamiliar with?
If you've somehow missed how these companies act then I'd say you're missing the table stakes to even discuss them: saying they're "everywhere" would not be an overstatement.
Also I don't get why you're clinging to morality as a loincloth: is there a logical reason to allow any of this? Even if you're a lover of all that is vice, we had gambling!
We don't need Kalshi to allow it: they represent a form of gambling that is less regulated, more susceptible to manipulation, more likely to cause unique adverse effects in the real world as people become incentivized manipulate arbitrary events it tracks.
-
You're confusing amorality with objectivity. If you're our resident expert on what words mean, the broadly tolerated concept of moral objectivity shouldn't be foreign.
And it's less contentious to apply it when instead of saying "Gambling is bad", we're saying "Allowing a private company to turn any arbitrary event in the natural world into an always available, poorly regulated, aggressively advertised lottery tickets is bad".
Regardless of if one considers gambling moral, the latter is bad to most logical persons. Ironically the stubbornness with which you're ascribing personal morality to other people for saying that is by far the loudest attempt to signal personal morality in this comment section.
You need to reflect on your motivations here. You are boiling down morality to one simple aspect but is that what the OP was even saying? If not, then you are adding that additional context I mentioned. I can recognize that a behavior is immoral and still say I’m unsure about the morality of the situation, especially about the morality of what to do about it. Meanwhile, you feel sorry for people because of a situation that exists only in your own mind.
Arizona filed criminal charges against kalshi and its executives in May and lost before it could even go to trial. The growing consensus among the courts is that states do not have the right to enforce this. Needs to go to the Supreme Court now
I'm seeing "U.S. District Judge Michael Liburdi in Arizona, a Trump appointee, denied Kalshi's request for a temporary block on Tuesday and ordered the company to demonstrate why the case should be in federal court given the new state charges" [1]. That's quashing a request for a preliminary injunction.
Not throwing out the case.
Meanwhile, "federal and state judges in Nevada and Massachusetts, respectively, issued early rulings in favor of states looking to ban Kalshi and its competitor Polymarket from offering sports betting in their states, while federal judges in New Jersey and Tennessee have ruled in favor of Kalshi. The Nevada lawsuit was remanded to state court."
You have it exactly backwards. There is a growing consensus among the courts that the states have the right to enforce this, and have since the CFTC was created.
It will go to SCOTUS due to the circuit court split.
> It will go to SCOTUS due to the circuit court split.
I highly doubt it, they declined the case so the circuit split will live on for now and most likely be resolved by the legislature via one of the many bills making their way
through congress. They could always take it up later but they're not so subtlety signaling that congress needs
to make their intent clear on this one.
I think gambling is defined by the players' behaviour more than the game's structure. There are professional poker players who I would argue do not gamble. They're playing risks as much as an insurance adjuster.
On the other hand, someone investing their life savings into McDonald's meals in an attempt to win a sweepstakes isn't buying burgers.
So the question really is, how many Kalshi and Polymarket users display signs of problem gambling? From what I'm seeing, it isn't negligible [1].
Gambling, at least in casinos, means betting on very random and unpredictable things like the roll of a die. That's the distinction between games of chance and games of skill.
In reality, every thing we do in life is a gamble. Even investing in US Treasury Bonds. (And if you don't think so, look at the national debt again.)
The Commerce Clause covers everything because they stretched it to include literally everything using "impacts market via supply shift." Even without any crossing of any state or even county line.
The ruling isn’t that growing food yourself is interstate commerce, they said that growing food yourself reduces interstate commerce because then you need to buy less food from others.
The problem with Wickard v Filburn is that there is literally no activity that doesn't qualify as interstate commerce, when the framers of the constitution clearly intended that "interstate commerce" was not an all-inclusive concept. If that's what they meant, why would they have placed any limits on Federal power? What is the point of having all those redundant words in the constitution?
That's why subsequent courts walked it back. It was an obviously flawed ruling that produces preposterous results.
I mean, can the government prohibit dying (and throw your corpse in jail) because death means buying less food from others? Can the federal government throw you in jail for not having enough children because that reduces the amount spent on baby clothes?
I don’t agree or disagree with the ruling (I don’t really care, I’m not even from the US), but I agree it seems pretty overreaching. I was just making the point that the court never claimed that growing your own food counts as interstate commerce.
Doesn't matter. Court held that that characteristic was sufficient to elevate the activity to Federal jurisdiction, which has been used as a lynchpin decision for exploding the Federal regulatory state. Logically speaking, If *pointedly not doing activity in such a way as to not have commerce be interstate makes it interstate commerce by virtue of decreasing one's reliance on interstate commerce, all commerce is, therefore, interstate commerce.
There’s a difference between affecting interstate commerce and being interstate commerce. It’s not considered interstate commerce, it only is regulated because it affects interstate commerce.
Imagine there’s a law saying that regulating abortion is federal responsibility and the senate then uses this law as justification to ban demonstrations around abortion clinics. Would that mean that demonstrating next to an abortion clinic counts as abortion?
The question isn't whether or not the commerce clause could regulate gambling. There's no debate that it could. The issue is that the CFTC does not regulate gambling. The question is what was the CFTC intended to regulate, not "what powers does congress have?". There's no dispute that congress could regulate gambling if they wanted to. They didn't.
CFTC seems to be preëmpting state gambling laws under commodities regulation (specifically, as "excluded commodities"). That sounds, to me, like a major question. The sort Chevron deferred to regulators. The kind our current SCOTUS says should be decided by the Congress. To my knowledge, the Congress has said nothing about prediction markets. Which means it's in the domain of states.
Otherwise, fuck it, let's launch a prediction-market based national health insurance market. I'll sell you a contract that pays my medical bills if I have a health event.
Congress didn't identify the markets it was regulating by common names or trade names. It doesn't matter if its generally called a prediction market, a commodities market, or a futures exchange. What matters is if it qualifies as a Designated Contract Market as per https://www.ecfr.gov/current/title-17/chapter-I/part-38 so if you want to actually have knowledge of what Congress said on this topic your going to have read all of that.
There is already a split decision on this between the 3rd and 9th circuits so it seems likely SCOTUS is going to take this up. I expect they'll be the ones deciding if this in the domain of the states or not. If they don't pick it up then its going to vary by circuit, such that it will be in the domain of some states and not others.
> What matters is if it qualifies as a Designated Contract Market
DCMs are a creature of rule, not statute [1]. The statutes that animate it are the CFMA of 2000, Dodd-Frank "special rule" for event contracts and CEA § 5. The core question, whether the CFTC has the authority to regulate this kind of DCM, is still open.
> There is already a split decision on this between the 3rd and 9th circuits so it seems likely SCOTUS is going to take this up
Links to the split opinions?
[1] To be clear, DCMs are undefined in statute. DCMs are just referenced in other statute. Part 38 is an implementing regulation.
Honestly, I have no idea what case you are resting if you think a petition to SCOTUS to hear arguments to settle all of this means its already settled.
Its seems like there is literally nothing you will accept to show that this isn't settled yet.
I don’t think this is settled law—I never said that. I think the argument for this not being under CFTC and thus federal jurisdiction is clear. I’m curious for someone to show the other argument. If someone just shows me my own argument back, as you did, I’m going to assume that sort of settles your view on it.
To the extent I’m challenging anything above, you’ll see it’s in rejecting anyone claiming this is obvious or settled.
"if someone just shows me my own argument back, as you did" - makes crystal you didn't read substantive parts of the document as both arguments are literally in that document.
I pointed out how you did not seem to understand any of the judicial opinions at issue here and you took your ball home because I have the nerve to disagree with the 3rd circuit (so did the 9th circuit! and the 2nd is about to as well!). I'm following up on all your posts in this thread because you are incredibly rude to everyone while doing the same exact things you accuse them of.
Edit: 2nd circuit denied Kalshi's request for an injunction against NY's enforcement. So yeah... I think I'm within pretty good grounds to reasonably disagree with the 3rd circuit.
Predictions aren't swaps as defined by federal law. If they were, the term "swap" would be so broad that every transaction and exchange of value in the world would be within the CFTC's jurisdiction, excluding those the CEA gives to the SEC.
The only reason the prediction market hasn't already been shut down is because multiple members of the president's family are heavily invested in the industry.
In a morally relativistic, legally positivistic hyper-individualism that ignores the objective truth and prioritizes individual “autonomy” over substantive moral ends, you can pervert any positive law to mean whatever you wish - this is how pornography came to be regarded as protected free speech. (The classical legal tradition views law as an ordinance of reason directed toward the common good.)
So I wouldn’t be surprised under the right social and cultural conditions and the right people in power that it could become regarded as a protected liberty. It is rather frightening that this relativism – deprived of objective anchors and standards – doesn’t strike people as terrifying. Too many people take for granted the status quo they are accustomed to, or they are so fixated on satisfying some appetite du jour that they fail to grasp the waiting Dionysian fallout[0].
I'm not really sure where you are getting this ivory tower view from. Pornography is not protected speech in the united states. The actual legal test as applied by our justice system for this "I know it when I see it" as applied under the Roth test. The practical effect of this is that our legal system is free to censor whatever it wants when it deems it necessary to. You seem deeply disappointed that our society as a result, chose obscenity quite often rather than censorship.
My general position has been that the durability of the Bill of Rights is directly attributed to what you call "relativism". When the government finds the Bill of Rights to be unpleasant, they simply decide it never applied in the first place.
The Founders didn’t exactly anticipate the internet. If states can place restrictions on certain types of speech (eg porn or abortion advocacy) they can certainly place restrictions on gamblers within their borders
I'll bite: futures contracts serve a valuable social/economic function outside of their existence, and are just a commoditization/securitization of something that arises naturally out of doing business (agreeing on a future price today). While you can gamble with futures contracts, the underlying purpose is actually incredibly useful.
Prediction betting has an argument that truth discovery is economically valuable, but I don't buy it.
If prediction betting was banned, only two businesses would be affected, Kalshi and Polymarket. If futures markets were banned, many businesses would be massively affected, and almost every business would be indirectly affected.
Probably without intending it you've gotten right to the heart of what's at dispute here.
The common language meaning of gambling is too broad and captures things that aren't legally regulated as gambling such as gambling (again common meaning of the word) with futures contracts. Sometimes gambling is dressed up a speculating, but one could argue that one can speculate as a participant in many card games since they allow room for analysis and aren't pure chance. This is what the legal dispute comes down too.
The other is the debate for the value of the truth discovery. Some folks buy it and others don't. SCOTUS will likely take the case to resolve the split between the circuits and we'll if the value of this even enters into the decision or it just comes down interpretation of the statutes.
>Probably without intending it you've gotten right to the heart of what's at dispute here.
Awfully rude.
>The common language meaning of gambling is too broad and captures things that aren't legally regulated as gambling such as gambling (again common meaning of the word) with futures contracts.
No it doesn't. No one argues that state gambling laws actually regulate the trade of securities, options, or anything actually covered by the CFTC, so this is a completely sham argument.
>The other is the debate for the value of the truth discovery. Some folks buy it and others don't. SCOTUS will likely take the case to resolve the split between the circuits and we'll if the value of this even enters into the decision or it just comes down interpretation of the statutes.
The value of truth discovery is completely irrelevant to these cases. Either congress intended to regulate sports gambling under the CFTC, or it didn't. The executive branch can't get around that.
Kalshi and Polymarket make money because they advertise themselves as legal gambling (I haven't done extensive research of this, but I do get alot of advertisements for them). Then they justify their existence as some sort of futures market.
This feels like a similar playbook to crypto. People make money through pump and dump schemes and/or luck/speculation. Then they justify their existence as some bastion of decentralized power/coordination.
That's really interesting. On another thread someone said something about health insurance related contracts like that was some kind of slippery slope bad outcome from allowing prediction markets. I didn't think anything of it at the time, but our health system is so broken I'll support anything that shakes up the status quo. I doubt Kalshi or Polymarket will turn in to that, but maybe they'll create a wedge for someone else to create a health event marketplaces.
I think a lot of folks here think I'm debating this because I support prediction markets, but I could have cared less which way SCOTUS comes down on this. Now I'm rooting for Kalshi when SCOTUS picks this up and not regretting the time I spent on this. I try to avoid commenting on anything political, but I had a moment of weakness while I was waiting for benchmarks to run. Thanks!
A future is a contract to deliver a good at a time at a price. That's ordinary business. All of the scaffolding around futures contacts is at core built around buying and selling actual stuff. A pork future is an agreement to buy actual pork.
The event contract isn't tied to the delivery of a good or service.
I asked about option contracts not futures contracts. As to futures contracts there are many that are not associated with anything physical (e.g. stock indexes, bitcoin, US treasuries, etc.).
No, lol, their opinion did not reach that. The third circuit's opinion stated that we need clarity from congress as to whether or not sports gambling, and also "bingo" (not making that up) are actually covered by the CFTC. They just said that the statute preempts whatever state law could be on this issue, which is not the same thing as what you said would be ruling "the opposite" which would be that the outcome of a sports game is a financial event. That's obviously not true outside of the context of gambling. Unlike, say, everything that is actually regulated by the CFTC.
And this is what I've been trying to get at here... who can actually say with a straight face that congress intended to regulate sports gambling with the CFTC? It's a ridiculous proposition to which there are no actual facts that support it. Nothing in the congressional record, nothing in the statute. Just a broad reading of the language while keeping one's head in the sand.
The 3rd circuit literally said they are '"swaps" subject to the CFTC's jusridiction' which is literally the opposite of what the 9th circuit said. Thanks for making me use literally twice in the same sentence.
The reference to bingo was something that New Jersey and the dissent brought up. Direct quote that covers both:
'Because Kalshi’s sports related event contracts are traded on a CFTC-licensed DCM and depend on event outcomes associated with economic consequences, they fit within the Act’s definition of “swaps” subject to the CFTC’s jurisdiction. See 7 U.S.C. §§ 2(a)(1)(A), 1a(47)(A)(ii).
New Jersey and the dissent “pile inference upon inference” and postulate that anything from bingo games to pingpong matches will fall under the CFTC’s jurisdiction.'
> The reference to bingo was something that New Jersey and the dissent brought up
That the holding opinion addresses, quoting the same exact section you did and then going on to say that "[i]n such far-fetched scenarios, Congress’s express delegation to the CTFC and the Securities and Exchange Commission to 'further define' swaps would prove useful." So yeah, that exact point stands.
>The 3rd circuit literally said they are '"swaps" subject to the CFTC's jusridiction' which is literally the opposite of what the 9th circuit said.
No, the 3rd circuit literally said that the CFTC designated Kalshi a DCM, so therefore it must be the case that its sports events contracts fall under DCM event contracts regulated by the CFTC. This is much more limited than my construction of the 9th circuit holding, which you insisted this is the opposite of it.It's literally not. The 9th Circuit's holding goes much further than to say they aren't a DCM. It says that a sports event can't be an event contract under the CFTC, so it does not even matter if it is a DCM or not.
You had me thinking you read the opinions when you came with the quotes, but it seems like at the same kind of superficial level the 3rd circuit is playing around at here. The 9th Circuit's holding is much broader and addresses the fact that the DCM designation is basically a sham, and clearly well beyond whatever congress could have intended with the statute.
And it's funny that you act informed about this but are playing ignorant the politics of the Trump admin's cronyism with Kalshi and its sudden and unprecedented designation of it as a DCM. Resting in the shallow depth of the 3rd circuit's opinion isn't a good place to be when you really think about what that court represents. And do you really think the supreme court is going to say that the executive branch can decide what congress intended by making designations like that? Fat chance. There's nothing in the congressional record that could ever indicate an intent to give the CFTC power to preempt state sports gambling laws on an individual corporate basis by special designation.
I feel like you're just interested in this for the culture war politics of it and take up the law as a barb. You're just being rude up and down this thread with your intuitive arguments which are really just legal non sequiturs but you don't get that because you don't do actual legal analysis (which is fine, I see all sorts of analyses on this site that I can't do, I just read in those circumstances).
"same kind of superficial level the 3rd circuit is playing around at here" - as you believe you're more authorative than the 3rd circuit, rational debate is an impossibility
Anyone is free to criticize, I guess that's why you also pay the 9th circuit no mind too. Get a grip. Or as you put it in the same thread below, congratulation on "declaring yourself the winner."
Edit: 2nd circuit denied Kalshi's request for an injunction against NY's enforcement. So yeah... I think I'm within pretty good grounds to reasonably disagree with the 3rd circuit. You really just come off like a buffoon.
/ES futures are used to hedge an SPX position or speculate on SPX. SPX options are also cash settled.
I’m not going to allow you to depose me, if you want to know more about futures contracts, CME and CBOE publish information on all of their futures contracts.
Not sure - to the extent to which Kalshi is a nationwide futures market, it is hard to imagine a more clear "interstate commerce" example. Congress should probably just pass a law delegating regulation of "sports futures" to the states to remove any legal ambiguity. Sports gambling is obviously pretty net bad for young men.
> Congress should probably just pass a law delegating regulation of "sports futures" to the states to remove any legal ambiguity.
Or they could do the opposite, and just say that apps like this are gambling, which they are, and not a "futures market" that has any real value to society.
I find value, for instance I speculate heavily on future AI capability advance as a way of hedging my own career. I don't find value in sports gambling.
For every bet, there's one person who finds value, and another who doesn't. Neither of those alone are sufficient to determine value to society as a whole.
> who decides? (always by definition an authoritarian)
By this measure any regulation of a commons is authoritarian. Fortunately, societies with this attitude tend to bee-line their ways to ecological collapse.
Insurance, prediction market, futures market, gambling - imo a lot of these are semantic distinctions.
I support banning sports gambling/insurance/futures because it is a big onramp for foolish people to maneuver themselves into disastrous financial decisions.
Quite a lot of the law is "semantic definitions" in the sense you're using the term. Things like intent and external circumstances are pretty typical for legal systems to take into account. If you're looking for the law to be mathematically pure, then this might be a problem, but if you're looking for the law to be flexible enough to handle real-world circumstances while still having some enforcement power that can be agreed upon, this is a feature, not a bug.
Yeah I'm an attorney and I post here a bit and it's always shocking to me that a lot of people here don't realize this. The idea that society would be better off banning insurance because it's like gambling is a severely incomplete thought. Really getting caught up in the broadest view possible, while disregarding all of the key details. It's entirely opposite to the approach taken by the law, which is to examine the key details to determine what actually is happening, and not get too caught up in labels.
For reasons I still don't understand, a lot of engineering-minded people seem to think the law is trying to be math and doing a bad job at it, when as far as I'm able to understand, it's actually just very much not trying to be math by design. I have no legal training of any sort, so it certainly doesn't require any sort of specialized knowledge to understand this, just having humility and being open-minded enough to recognize that my own expertise is not necessarily relevant to understanding how a system designed for an entirely different domain works.
It's an absurd proposition. Come up with words that capture every single possibility and what should be done about it? That's not possible. Even in programming, you capture the exceptions categorically, not necessarily individually. Building nets to catch errors, not rules to deal with every single scenario that could EVER be possible.
And then they rant about patents! Like it should be easy to come up with a pithy statement that is meant to delineate what should be protectable from what shouldn't for EVERYTHING that has yet to be invented! Like that's a trivial task!
Nobody is forcing you to gamble. If you think it's a "net bad" then simply don't do it, it doesn't need to be illegal for consenting adults to make transactions with eachother.
Great! I'm sure you won't mind if our Committee for the Promotion of Virtue and the Prevention of Vice goes through your financial transactions, browser history, messaging, friends list, and geolocation records looking for signs of improper behavior. We're here to help you avoid impure thoughts!
I don't believe you actually have trouble understanding that the opinion that some private transactions are worth making illegal is equivalent to thinking that literally no privacy rights exist. I think you're smart enough to know that people can think that it should be possible to prosecute a company nationally advertising that they provide a service without thinking that it should be possible for the government to arbitrarily decide to force a citizen to turn over all of their private communications without a court order.
Please remain amenable to that argument when it's made about abortion, gay marriage, etc, then. There are a variety of transactions people want to arbitrarily regulate based on what they think is "obviously a net bad" and you shouldn't assume that your personal taste is going to be the one catered to by government forever.
It's not an argument in itself, it's just rejecting a counter-argument. The opposite of "it's never okay for the government to interfere in voluntary transactions" isn't "the government must always interfere", it's "sometimes it's okay for the government to interfere"
Government intervention into what is essentially private consumer behavior (not like this is a deal between MSFT and Intel or whatever) is dangerous, incompatible with the values of personal freedom and should be invoked only in extremely rare and narrowly scoped circumstances.
Now, I'm willing to accept that people will disagree about what deserves intervention and how much is acceptable. We can bicker about how much retail sports betting, guns, drugs, adult content, etc, etc, should be curtailed, that's fine.
But the hill I will die on is that people, such as yourself, who use a situations like this, where the overwhelming majority will probably want some amount of intervention as a soapbox to peddle intervention into people's private behavior for it's own sake like it's some sort of good default policy are evil at their very core and should be ridiculed, shunned and marginalized for the benefit of us all.
Sports gambling has been illegal in most of the US for like… ever. A very long time. It was fine.
People are acting like we’re going to 1984. No, we’d be going back to the status-quo a few years ago.
We tried the whole “legalize sports betting” thing, really we did. We gave it an honest shot. But it turns out everyone was right all along: it causes a lot of problems for a lot of people, it’s complex legally, and it offers no benefit to society.
But not so much that I'm gonna just let people who got to the same conclusion based on bad ideology and faulty logic off the hook. They're not suddenly not an enemy because they're on the same side of this issue.
Plenty of religious fundamentalists want to see this regulated too. Is their ideology somehow less odious because a blind squirrel has found a nut today?
My point is that I don't believe in some fantastical natural law against intervening in voluntary interactions, not that we should presumptively do it if there is no reason to do so.
You did say you're perfectly fine intervening in a way that appeared general- that is, I don't think it's wildly out of line to read you as saying 'there is no tradeoff' rather than that 'the tradeoff is worthwhile in this particular case'.
Unfortunately, gamified gambling on your phone is so bad for society that I think it should be banned or heavily limited even at the expense of the freedom for consenting adults making transactions with each other.
Same argument around banning hard drugs. They just make society worse. Obviously hard drugs are more clear cut and definitely worse for you, just saying, similar situation in principle.
But US has to pass https://en.wikipedia.org/wiki/Unlawful_Internet_Gambling_Enf... in 2006 to outlaw PokerStars and all sort of online casinos, so clearly a state gambling regulation is not sufficient. Now tell me why does that not cover Kalshi / Polymarket?
I have given out a certain of points and bubbles in my life under harm reduction programs. These efforts (which I've worked at but not been central to) have had a measurable and positive impact on syphilis rates in rural Colorado among a number of other metrics.
While I think it's not great folks use, the worst parts of many of these things are created by states sanctioning things. People mess their lives up all kinds of ways and creating a black market pretty much just changes the incentive structures. It just makes it more likely folks will do fent because that's what they can find, but if they can't find that they'll drink hand sanitizer.
Unless you think that these folks should kill themselves off using tainted drugs (which was a policy pursued by the US government during alcohol prohibition), then legalization program makes some sense.
Introducing a government monopoly on things like heroin would have a lot of up-sides with the downsides largely being slightly skewed versions what we have right now.
I don't think that marketing heroin in social media apps the way gambling does is a sane idea, but I also don't think gambling apps should be allowed to market themselves.
Like a lot of things, I believe having a government undercut the market for things would have a positive impact, but depending on your view of the relationship between the DEA and the CIA you might think that is already happening but in the worst of all possible ways,
Harm reduction is a double edged sword and should be assessed on the actual merits of the evidence - I am skeptical that legal heroin would be net mortality reducing.
There's already causal inference evidence out there indicating that needle exchange programs reduce rates of HIV and other bloodborne infections, but increase the risk of fatal overdose. If simply making fresh needles more accessible increases overdose rates, I suspect legalizing heroin would have a much larger effect.
Harm reduction could be mortality neutral and still be an improvement on other metrics.
But I personally am not sure what the causal relationship between access "clean needles" and "fatally overdosing" is, though I would be interesting in hearing that account.
The War on Drugs people aren't actually serious. They think too small or are kids wanting to play with toys. Fighting the supply side gets you narco subs and secret passageways and cartels. Fighting the demand side with housing and jobs and hope for the future and families and therapy and happiness just doesn't look as cool on tv as rolling up with a SWAT team with GUNS mowing down bad guys.
You used to - like a century ago - be able to buy things like cocaine and methamphetamine OTC at pharmacies and they were not as big of a problem as they are today. A lot of today's problems come from things outside the drug itself. Most overdose deaths, for example, come from the drug user being wrong about the amount they're injecting because their dealer lied to them, or didn't know themselves because their dealer's dealer's dealer changed supplier, and didn't notify those downstream because reliable communication is difficult because of the police.
jfc this is just terminal contrarianism. do we really need to debate whether it's harmful for extremely addictive drugs to be widely available? the Chinese literally fought wars over this
Extremely addictive drugs are already widely available. People at the lowest rungs of our society have very little difficulty obtaining them.
If we can create a situation where those people aren't breaking into cars, stripping the wire out of buildings, or dying in the street - that would be a net positive.
Prohibition has five decades of abject failure under its belt. Try something else.
Straw man. Nobody is calling for banning gambling nationally.
For hard drugs, the expert consensus around harm reduction is supervised injection. Casinos are, in one sense, supervised injection for gambling. Kalshi, on the other hand, is the local dealer selling fentanyl to teens [1].
Kalshi ran a series of Youtube videos last year that were deepfakes of athletes saying really outrageous stuff. It was hilarious. It was also deeply provocative and exploitative. It showed exactly who they are... people who will test the edge of decency.
Wonder how proxies/VPNs play into this, since Utah was recently in the news about an age verification law that basically said you're liable if anyone physically in Utah accesses a restricted site.
While I do hope courts will strike down the the laws purporting to regulate users in a jurisdiction when users have taken steps to hide their true location (on the grounds that a state does not have the authority to regulate what happens in another state, but enforcing those laws as written means they do in practice), it doesn't seem like such a ruling would help the people who want to offer sports betting.
Given that gambling, almost by definition, requires exchange of money (or something approximating money), it's much harder for the Kalshi's and Polymarket's of the world to credibly claim that they didn't know a user was in Utah (for at least the ones domiciled in Utah).
They could take payment only in crypto, but I suspect that you can't run a federally-regulated commodities futures exchange without a certain amount of KYC (if for nothing other than AML and income reporting) that makes it practically infeasible to pretend you didn't know.
Oh, didn't even know Kalshi enforced KYC, but they do. Every time I heard about these two, it was people using basic paid VPNs to access the non-US versions and deposit cryptocurrency without KYC. When everyone was talking about the 2024 presidential election bets, they didn't have a US version at all. But at that point it's about federal law, not state.
The other law was about porn that I guess wasn't always paid for, so yeah.
Interested to see how this turns out. This has to do with state laws and federal powers.
I think gambling should be legal, but should be illegal to advertise. Just like the government settled with the tobacco companies to restrict advertising, we should do the same with gambling companies. No advertising.
Agree that gambling should be legal, but only about specific things and only in specific places. You should have to physically travel to a location to gamble, and once you're there, you can only gamble on a short list of things, like games of chance played on-location, and maybe horse racing. Gambling via the internet should be illegal. Gambling on sports, the news, political events, and anything else not on the whitelist should be illegal.
The challenge with regulating cannabis advertising is that dispensaries have turned their storefronts into highly effective advertisements. Few storefronts in NYC are more eye-catching.
It's hard to regulate advertising when the store itself is the ad.
Same is true for (many) the other vices. Doesn't seem terrible for them. Much better than currently where Kalsho is twice in every NFL break, WNBA (Valkyries!), MLB, Yahoo Finance and commercial breaks on TNT and various Roku channels.
When did the US develop this entrenched gambling problem?
When I lived there online poker and day trading was the extent that what seemed like a smallish fraction of the population was into. Though a lot of people watched poker.
Now it seems like there is a whole generation of people betting on everything from football to heads of state getting removed from office.
Also, my understanding is throwing sporting event is normalized. I saw a football highlight where a receiver basically ran out of bounds when he could have easily scored. It looked sketchy asf.
As for Kalshi, if it’s not gambling what is it. I’m not buying the derivative framing. There is frequently no underlying asset to own and no way to apply mosaic theory. So it’s gambling in my book. I don’t feel sorry for Kalshi’s founders for the Utah AG throwing the book at them.
> When did the US develop this entrenched gambling problem?
In the 2010s the TV networks normalized fantasy sports into sports betting. The vehicle they used for this was through the 45 second commercial advertising breaks that run every 2 minutes during American football games, and then across the other important American sports thereafter. If you were a regular watcher of sports in the US you've been brainwashed over the last 10 years into thinking this is ok. Some are aware of this, many are not.
kalshi and polymarket are quite obvious gambling sites. any pedantic arguments to the contrary are strictly financial chaff to enhance their operating margins until the regulations finally catch up.
they were never an innovating marketing play... it was the culmination of a gambling company committing to regulatory capture as evinced by Donald Trump Jr (totally not) sitting on BOTH BOARDS as a "paid strategic advisor" or whatever lie they want to spin.
There are ads on the DC Metro right now that advertise one of these as a source of truth for election polling. The poster says something like "98% accuracy" and in super fine print, specifies something like "within 2 hours of polls closing" and other normal fine print stuff.
To me it's absolutely crazy that the "gamble on anything" apps are being advertised as some kind of polling software. I've already seen at least one race called into question because the gamblers bet on the wrong pony.
They're pure corruption engines designed for insider betting. The top brass of these companies need to be made example of.
this is an answerable question and these markets are generally well calibrated (including on election outcomes), they have a good brier score.
i would not premise an anti-prediction market argument on their accuracy being bad, you are building on shaky foundations. the better argument is the paternalist protecting stupid people from themselves imo.
I've seen those and they are crazy! Many elections are decided by the primary anyway, and then of course exit polls are going to be basically accurate 2 hours before the election. It's not even that fine print, I think they may actually just be stupid.
The LDS church (The Church of Jesus Christ of Latter Day Saints), which is also based in Utah has provided explicit guidance against participation in Kalshi and Polymarket as gambling.
They absolutely have been the main force behind the timing of this push. It was the main topic of General Conference a few weeks ago and one of the most eyebrow-raising articulations of official church policy.
Given the way that the church has explicitly encouraged state legislators to shoot down recent laws it's not surprising to think they'd be pushing for this.
It has also been the talk that I've seen the most discussion about in both faithful and non-faithful circles.
Also it's the only time I've seen nonaffiliated news articles about a statement the church has made about a topic other than lgbtq rights or abortion - notably much more politicized topics in general. That may be due to my own inattentiveness however.
All that to say that calling it "the main topic" is incorrect in technicality, but not in impact imo.
> Given the way that the church has explicitly encouraged state legislators to shoot down recent laws it's not surprising to think they'd be pushing for this.
And the way they've influenced voters in Idaho and Arizona recently.
I thought it worth posting the stance for those not willing to click
...
Gambling is motivated by a desire to get something for nothing. This desire is spiritually destructive. It leads participants away from the Savior’s teachings of love and service and toward the selfishness of the adversary. It undermines the virtues of work and thrift and the desire to give honest effort in all we do.
Those who participate in gambling soon discover the deception in the idea that they can give little or nothing and receive something of value in return. They find that they give up large amounts of money, their own honor, and the respect of family members and friends. Deceived and addicted, they often gamble with funds they should use for other purposes, such as meeting the basic needs of their families. Gamblers sometimes become so enslaved and so desperate to pay gambling debts that they turn to stealing, giving up their own good name.
And I’m saying there’s no evidence for that. Illegal gambling arrest rates haven’t significantly changed since before Kalshi and Polymarket existed, so there’s no reason to believe that banning them would change that. Combined with other states’ examples wherein banning gambling outright didn’t cause significant social harms (e.g. organized crime), and I think the burden’s on you to show why CA is special and would suffer from a gambling ban.
Like, are there some gamblers who, if it were made illegal, would do it illegally in harmful ways? Yes! Are there enough such people that the social harms of banning gambling would be significant? I don’t think the data bears that out. This isn’t prohibition; this is something that has already been widely proscribed by law in the past without serious negative consequences (other than missed opportunities for riches on the part of the gambling companies that pushed to relax those prohibitions over the last decade).
>The legislature shall never grant any divorce. Lotteries shall be prohibited except as specifically authorized upon the affirmative vote of sixty percent of the members of each house of the legislature or, notwithstanding any other provision of this Constitution, by referendum or initiative approved by a sixty percent affirmative vote of the electors voting thereon. [AMENDMENT 56, 1971 Senate Joint Resolution No. 5, p 1828. Approved November 7, 1972.]
>NOTES:
Original text — Art. 2 Section 24 LOTTERIES AND DIVORCE — The legislature shall never authorize any lottery or grant any divorce.
Ehh I wouldn't try to appeal too much to what the LDS church thinks about this. They require members to give 10% of their annual income to the church, while already having close to $300 billion in the bank.
Everyone knows the state of Utah is largely run by the church.
> Everyone knows the state of Utah is largely run by the church.
Surprisingly few people know this ime. It's worth pointing out as one of the few areas [0] where the church has as much pull as its members think it does.
While I wouldn't look to the church as a bastion of morality for So Many Reasons, it's worth looking at a hard example of how it is able to manipulate politics in Utah, and by extension nationwide.
[0] Other areas worth being aware of are Idaho and parts of Arizona of course.
I don’t see the clear difference between something like Kalshi and, say, Robinhood. I do see a clear difference between Kalshi and casinos or sports gambling sites like Fan Duel; in the latter, your counterparty is the institution itself. This creates a lot of perverse incentives on the part of sports gambling sites to maintain their edge, such as banning bettors that are too good at playing the odds. Kalshi, on the other hand, is never your counterparty in any transaction.
Now, Robinhood is a brokerage, regulated by FINRA, and has been fined for misbehavior in the past. So I am more than willing to believe that there is daylight here that I’m not seeing. But anything that lets you speculate attracts a certain clientele, and I think the most important distinction is whether or not the platform itself is an interested party.
If the differentiating factor is just who you’re betting against, how are Kalshi et al any different from online poker? It’s still gambling, the house just takes a rake
Because you can easily collude and cheat at poker so it needs to be heavily regulated or outright illegal to prevent theft. You can't really cheat at prediction markets, unless you have insider information which they can litigate after the fact.
Surely you’re being facetious, insider trading is obviously a huge problem that is rarely enforced and we’ve already seen instances of people actively influencing events or using false information to fake the result of a bet
The one I remember is from Polymatket, about whether Trump would end the Gaza war by a certain date. I bet no, and it resolved to yes on the basis that Trump said that he ended the war.
I agree that whether the house has a stake in the outcome is (probably, I haven’t read the statute) not relevant to the definition of what is and is not gambling under Utah state law. Online Poker is very obviously a game though in a way that Kalshi and online brokerages aren’t (even if they share game like elements, such as random rewards). Important to caveat that prediction markets do allow you to speculate on the outcomes of games occurring off the platform, and maybe that is the distinction here between Kalshi and Robinhood, but then is Kalshi still “obviously” a gambling site if they ban markets on sports outcomes but leave everything else?
If Kalshi is not a gambling operation then it is an unregulated futures market, which is still illegal. There are perverse incentives in futures markets too, which is why they are regulated.
Also speculators serve an important purpose: hedging strategies require speculators on the other side. It is not just a "certain clientele," there are people who run profitable businesses on speculation (it amounts to collecting insurance premiums from people who want hedges).
> Kalshi is very clearly a licensed futures market regulated by the CFTC
As an excluded commodity. Based on the CFTC's own rule making. Based on this logic the SEC can go back to deciding it gets to regulate anything as securities fraud.
Describing an organization with a license from the CFTC as an "unregulated futures market" is just flat wrong, I'm not really sure why you're motte-baileying here.
They offer contracts that are almost certainly outside the scope of regulation, an appeals court has already ruled that some of their contracts are indeed subject to state laws and not CFTC regulation, and they are continuing to push the envelope. How is it wrong to call them an unregulated market under the circumstances?
Bernie Madoff's operation was also subject to a regulator and was properly registered as a broker-dealer; that did not somehow make it a regulated operation, at least not in the sense of actually complying with the regulations. Boiler rooms are also subject to a regulator (the SEC) and obviously are not regulated brokerages.
Really it sounds like this is a disagreement about what it means for a market to be "regulated" -- I draw the line at compliance, you seem to draw the line elsewhere.
Not to go prescriptivist, but yes I think your "line" for regulated is just semantically incorrect, a non-compliant organization can still be regulated.
The CFTC was created to hedge real risk. Onions iirc?
Kalshi creates risk where there was none before. The 'future' on the 'commodity' of 'number of dunks by an aging shaq at a halftime show'.
Courts have taken the dimmest possible view of this legal fabrication and I expect their losses in courts to continue without direct intervention by the Trump scions.
People will say (including in this thread) that it allows them to hedge against negative outcomes. What negative outcomes are experienced by someone hedging against whether LeBron flies his helicopter to practice or not?
basically, does the government have its thumb on the scale makes it legal. Gambling is so bad and illegal, except when the pennsylvania lottery does it. Alcohol, bad and illegal, except when the state monopoly sells it.
That's such a poor argument. Illegal building is bad because it's illegal; illegal gambling is bad because it's illegal. This is just how laws work. Heck, in the US even homicide is bad because it's illegal, when you consider that there is a legal version of it.
It's really the worst of both combined. There is ample gambling like options and behavior on Kalshi
&&
policy makers, assistants, journalists, and the like are insider trading - and the president of the united states is intentionally market manipulating for profit
A week ago if you dared to say anything critical of polymarket you would be drowned out in replies talking about the "wonderful societal benefits" of gambling on daily life and how it "informs decision making" and helps the "common people".
I liked it for political races as an alternative to polls. Was terrible for several other things. 99% of it was really just sports betting, which I can't see being a good thing.
The law can always distinguish the intent, which might be hard to prove, but not impossible. For instance, a PAC making large bets would raise a lot of suspicion. One Brazilian fugitive currently in the US has injected about a billion dollars in the form of bets on a Brazilian betting company, and that has caught regulators' attention.
Not really. I can recall countless threads where everyone said that this improves information availability. Do you want me to go through my post history to find them?
The stock market is not like sports gambling because it is connected to actual economic activity and it can be positive sum (everyone wins), unless you are talking about degenerate derivatives like zero day options, which are like gambling and Utah probably would like to ban or make less accessible to uninformed 18 year olds. It's a lot harder to know where to draw the line in financial markets, and that is where lawyers perhaps should be spending their time figuring out; instead, we live in a world where sports gambling is being pitched as a form of "investment".
That was true at one point in time but right now the stock market is quite similar to Polymarket. The bond market is the one that would have been a better example.
Buying a target date fund and holding for decades until retirement is not similar to gambling and despite what some parts of the internet would have you believe, that is how the majority of individuals participate in the stock market.
If you either (a) treat it like gambling or (b) don't participate at all because you think it is gambling, then I am sorry for your sake.
> It's very easy to start trading options and lose all of your money overnight. There would be no recourse
Of course there is. If the broker improperly evaluated your suitability to trade options, you'd be able to–at the very least–cost them tens of thousands of dollars in compliance costs. In all likelihood, a retail investor taking their broker to FINRA arbitration has even odds of prevailing.
If you answered the options questionnaire and placed the trades yourself, you have essentially no case. So in reality what you are saying is not really true for 99.9% of people that lose money on options
And even in the extreme case that you did file a claim and you were awarded damages it would probably be only for a fraction of what you lost
I lost a bunch (not all) of money in options after checking a box that said "enable options trading" and answering a few multi-choice questions about how they worked. Nothing happened to my broker.
The number seems very small compared to the sheer number of retail investors that lose money on options and a lot of these don't even go in favor of the complaintant either.
Just to clarify I'm not talking about somebody doing some sort of complex options play that ends them up in debt when they are 17 years old or something like that.
I'm talking about the average case where somebody signs up for a brokerage account, funds the account, accepts the disclaimers and fills out the questionnaire to do options, is approved for level one, buys some call options, and they all go to zero. Why should they get their money back?
> number seems very small compared to the sheer number of retail investors that lose money on options and a lot of these don't even go in favor of the complaintant either
Most retail investors don't complain. And most brokerages settle before going to arbitration, because the win rates aren't great and either way it winds up on your record.
> I'm not talking about somebody doing some sort of complex options play
Those are actually more likely to go against the investor. Someone making an over-leveraged nonsense play is more sympathetic. (Or, investor was an idiot but broker failed to file a trade report on time or sent a stupid text or whatever.)
> Why should they get their money back?
Big question. Simpler: they do. A quarter to a third of cases between '21 and '26 resulted in customer awards, per your source.
There’s a reason both Kalshi and Polymarket were quick to make political connections (aka pay bribes). They know what they are doing is illegal, and waiting for legislation like sports betting apps did would take too long. So they bought get out of jail free cards instead.
POTUS can't pardon state convictions. This will be decided in courts. One perspective is that US taxpayer is paying kalshi's legal bills, but still the final outcome is not within Trump's ability to change.
If I were Iran I would regularly put up 10 million or more on bets that the US wont attack Iran the next day and if somebody takes up the bet you know you are on.
That does very little to diminish the incredibly suspicious nature of having the family members of a notoriously corrupt president on the board of a dubiously-legal-at-best company whose product is a platform for betting on major world events.
These venues do not have enough liquidity to attract Trump and his cronies. There might be people lower down the food chain who are taking advantage though.
Donald Trump Jr. is a paid advisor and investor to Kalshi and Polymarket. Why bother betting if they will just give you cash for having the right name.
Granted, the son whose wedding you skip has got to be lower down the food chain.
In fact, open corruption is preferred because it creates a co-dependence to prop up the system. It puts you under then thumb of the administration because they can decide to enforce the law at any time.
It's shocking that 10 years in people are still falling for the "it can't be X, because X would be too obvious and stupid" trap when it comes to Trump-land.
as well as all the other points everyone else made, less conspicuous ways to profit may also have upper bounds, even if a prediction market has upper bounds two sources of profit will probably allow you to profit more than one.
it is true that a smart operator may like to profit only in the less conspicuous way, but what would cause you to think that applied to Trump and his family?
These people are seasoned grifters. They don't look for one big winning ticket, but rather multiple streams. A million here, a million there, pretty soon you're talking real money. For your rank-and-file workers that's serious.
It's always plainly obvious what is illegal. Given the total lack of ambiguity, why do we even need all these courts and judges to decide stuff? After all, we're all intimately familiar the Commodity Futures Trading Commission Act of 1974, relevant state laws, and how the constitution would control the interaction bewtween these. /s
I despise gambling and would very like if there was less of it. But that's not a legal opinion, those are just my feelings. There are good faith legal arguments that these state laws cannot override federal laws and that the federal laws allow these prediction markets. We live in a country with an enormously complex legal system and with a volume of legislation that is, without question, far beyond what any single individual could reasonably comprehend. This often means that what is legal and illegal is unclear. I think this is one of those circumstances.
I'm not saying I'm right here, but I am saying it seems facially ridiculous to consider "an opinion on who will win the super bowl" as a commodity future. Like, nobody is getting a superbowl win delivered to their house after the future contract executes.
all of this stuff is very obviously sports betting. Kalshi can say the piss on our pantlegs is rain, but I don't feel very obligated to belive it. I recognize the legal argument, I personally think it's bunk, I think it's reasonable for a legislator to say it's bunk, and it is hardly settled to say that Utah can't do this.
In fact, we rewound to, say like 2010, this would be completely obvious that Utah is correct.
I guess I think these concepts are slightly fuzzier than you do. I think concepts like gambling, speculating, hedging and investing are all distinct but also all have some overlap. But again these are just my feelings.
I haven't read the CFTC Act of 1974, but I've read opinions of respected lawyers and legal scholars on this issue and there doesn't seem to be a consensus. I think there's a good chance this one goes to the supreme court. SCOTUS doesn't usually weigh in on things that are "facially ridiculous."
It seems many people seem to think our justice system is now just a sham, but I think that at present, despite its many flaws, it is by far the most well functioning branch of our government and that more often than not, the courts are making a good faith effort to do a difficult task.
If I were god-king would I make legislation to ban prediction markets for sports events and such? Without question. Is it obvious to me that our current set of laws does not grant the CFTC jurisdiction over this? I guess not.
and that the court attempts to interpret and apply laws, not create them? And the legislature can just change laws if they don't like what the court does?
Just because some highly compensated lawyers, and some who wish Kalshi would butter their bread, throw some dust in the air doesn't mean we have to strap on a dunce cap and pretend a bet on the superbowl is really a commodity future. We don't even have to pretend that's a reasonable opinion to have.
I agree, this needs to be decided by the court. But it's not really an issue of a state law trying to supersede a federal law. It's a state law superceding the authority a _regulator_ believes it has.
Kalshi has a serious uphill battle here. As the Judge said in granting Utah's motion and delying Kalshi's motion for a preliminary injunction:
> Shelby determined the text of US law makes it clear that state regulation is not forbidden. US law states that CFTC jurisdiction does not “supersede or limit the jurisdiction conferred on courts of the United States or any State,” and “explicitly provides for State regulation of its gaming laws in all but a few specified cases,” he wrote.
> “Congress is aware that some States permit gambling while others do not, and the CEA explicitly provides for State jurisdiction,” Shelby wrote.
Right but the CFTC is saying their authority is based in federal law.
Judge Shelby’s interpretation quoted above seems in conflict with how the 3rd circuit ruled in Kalshiex v. Flaherty, which is why I think the law is not entirely clear yet. I would be surprised if SCOTUS eventually weighs in
This is a bad take. What they are doing is quite obviously legal right now. Federal law trumps state law and the feds have an opinion, despite being weird and controversial.
There are a number of ongoing legal battles about the federal laws but until they work their way through the courts, it's "legal". Also, it could all get resolved with a new presidential administration in two years. This is the correct solution.
We shouldn't cheer for personal prosecutions over definitionally legal activity. Nothing good will come of it. See also: Sending mifepristone across state lines, or traveling out of state for abortions.
Whether pre-emption applies in this case depends on whether the courts accept Kalshi/Polymarket's claim that they operate a futures trading platform, not a gambling platform. If and only if that claim is accepted is there a pre-emption argument, and only then would the opinion of the Commodity Futures Trading Commission be relevant.
And while that is winding through the legal system, courts have decided that Kalshi/Polymarket can continue to operate. That might change in the future, but it is the present reality.
As long as the business is legal to operate, there is no justification for criminally prosecuting the people engaged in that business.
That courts have not ordered them to stop operating does not mean that what they are doing is legal. They could face additional counts for their behavior while the case is pending.
"As long as the business is legal to operate, there is no justification for criminally prosecuting the people engaged in that business."
You are begging the question: assuming that the business is legal to operate in the state of Utah. You keep presenting Kalshi's arguments as though they enjoy some presumption of legality prior to a ruling.
Presumption of legality pending trial is rather different from "quite obviously legal[emphasis in original]" or "definitionally legal".
"until they work their way through the courts, it's "legal"" is a much better phrasing and if the comment had stuck to that it probably wouldn't be downvoted.
"While gambling is legal under U.S. federal law, there are significant restrictions pertaining to interstate and online gambling, as each state is free to regulate or prohibit the practice within its borders."
While I know of a few cases where federal law can force a state to have looser restrictions (for example, the second amendment), it's pretty uncommon. Usually if a state wants to ban something, it can ban it and federal law can't stop such a ban without a pretty strong constitutional justification.
> While I know of a few cases where federal law can force a state to have looser restrictions (for example, the second amendment)…
The Second Amendment isn't even really Federal law, nor is the rest of the Constitution. It's the supreme law that sits above Federal/state law and constrains what Federal/state laws can do.
(And the Tenth Amendment protects state laws significantly from Federal laws, where applicable.)
If it were that simple then these markets would have been shut down already.
Matt Levine has gone into great detail about the legal chicanery that brought us here, but it summarizes as "it's not gambling, it's futures trading".
This seems like nonsense to you and me (and Matt Levine), but our opinions are irrelevant here. The courts' opinions are, and so far they've been coming down on the side of the prediction markets. Mostly.
So by definition - as weird as it is - it's legal. So far.
People are still selling fentanyl without a prescription. Is that legal?
Courts move slow, especially when the party being targeted has a lot of money. Them allowing Kalshi to operate isn't an endorsement, it just means they don't see what Kalshi is doing as a significant harm. The injunction to stop them from operating in Utah is still winding it's way through appeals.
Whether or not what they are doing is legal is not determined until they either settle, Utah drops the case, or the trail and appeals process determines that they are not guilty.
"The state did not issue arrest warrants for Monsour and Lopes Lara. Instead, they have been issued summons to respond to the charges in Third District Court in Salt Lake County"
I don't think your fentanyl dealer will receive the same treatment. They aren't even taking away the "drugs" from Kalshi.
No, and in fact this is a pretty good way of getting a big settlement check out of the district if you're willing to suffer the hassle of an (illegal) arrest.
Which means it's not a good or obvious way to tell if something is illegal or not.
Cops don't show up for civil offenses and most criminal offenses (particularly white collar offenses). Cops are also notoriously bad at understanding the law. Funnily, an illegal arrest is a good example of where the cops don't show up to arrest someone for breaking the law.
You are using faulty logic to determine what is and isn't legal.
Isn't it way more complicated than that? A state can obviously make things illegal in that state that aren't illegal nationally, they do it all the time. There would have to be a positively conflicting law to be a debate. (like with drug laws) Normally going in the other direction. Pretty sure you'd need a constitutional amendment to bind a state from doing something. Like in the case of drugs where federal law is often more strict, there's a whole body of case law around that. They made a commerce clause argument, and there's a doctrine they can't force the states to act to enforce a federal law, but also the states can't countermand the federal law, there's a whole history of courts dealing with the interactions.
> there's a doctrine they can't force the states to act to enforce a federal law, but also the states can't countermand the federal law, there's a whole history of courts dealing with the interactions.
The Fugitive Slave Acts were two of these conflicts. The first one overruled any state that offered sanctuary while also making it a federal crime to assist runaways. The second one aggravated tensions between slave states and the rest of America. Under the Fugitive Slave Act of 1850, it was not legal for a suspected runaway slave to deny being the slave described in the paperwork. States were required to assist slave catchers. Also, suspected runaway slaves were not permitted any sort of trial. It legalized kidnapping any black person who vaguely fit the description on the paperwork.
Prior to the Commodities Futures Modernization Act of 2000, some states regulated credit default swaps as insurance products while some state's statutes said that CDS were gambling (and outlawed it completely). The CFMA overruled the states that had outlawed CDS. This was one of the major causes of the 2007/2008 financial meltdown.
I love that brief moment it gives me to decide if it's really worth it or if I really even want to read the article after all. It's the same thing with ads before a video clip - just a moment to think 'Do I really want to even watch this video clip?'. Nope - close tab.
When will we start holding the people who found and operate companies whose sole purpose is to break the law accountable, rather than letting them hide behind "limited liability"?
These founders should be in prison for promoting illegal gambling. Same federal charges mafiosos get caught on for a "friendly card game".
Thankfully that part of the law didn't stand under closer inspection. As anyone on this website should know, it's technically impossible to identify all VPN users or geolocate VPN users behind their VPN. Anyone can set up a VPN on a raspberry Pi and leave it at a friends' house in another state. Under the law they tried to pass, adult websites would be liable for this.
Slippery slope argument. You can have authoritarian, anti-people legislation, and you can have pro-people, anti-corporation legislation. These are very different, and any legislator or ideologue that tells you any different has listened to too many Maggie Thatcher and Ronald Reagan speeches.
The ONLY difference is who's reading and writing the legislation. I never know if I should be alarmed or humored by people so blind to their own political biases.
I am very much not blind to my viewpoints. I believe the authoritarian pseudo-Christians that run Utah are dangerous people with dangerous "political bias" (adults call this ideology).
Sympathetic but that's not relevant. GP is not talking about what kinds of things corporations should be held accountable for, but whether their officers should be held accountable. At the heart of this is whether the punishments for corporations are sufficient if they don't actually deter illegal behavior.
"Facing felony charges" doesn't tell me much, and the current state of the world tells me those charges will be dismissed as soon as some money moves around.
> the current state of the world tells me those charges will be dismissed
We play this game on HN every time anyone is charged. When Holmes was being sentenced there were still folks on here who were convinced (with zero research or evidence, of course, just vibes) it was a scam.
in Utah felony charges means potential prison time.
As far as what the current state of the world tells you, what would you have done then? Should Utah have dispatched assassins? They are taking the leaders of the company to criminal court. I can't believe I have to stand up for Utah here.
I feel you’re being deliberately obtuse. Facing charges doesn’t mean charged, charged doesn’t mean tried, tried doesn’t mean convicted, and convicted doesn’t mean incarcerated and/or fined.
There are many more steps in the justice system where they could get off easy, and there’s plenty of precedent for that.
This is the old, "Easier to ask for forgiveness than to ask for permission"
A lot of these companies have taken this approach. Break laws until someone finally notices AND does something about it. The runway to a slap on the wrist is often times more financially beneficial to companies - there is no incentive to stop if you run a billion dollar company and breaking the law gets you a $50M dollar fine you make back in a single month.
I thought SOX (Sarbanes–Oxley Act) was supposed to prevent a lot of this, but I guess companies just continue to find loopholes to exploit.
I think sometimes people need a visceral demonstration of what bad laws are actually preventing. Uber was a pareto improvement in my view: we are in a better world both for consumers & for low-income wages having ridesharing as a backstop.
On the other hand, I've come around to the view that sports betting is a net unqualified bad -- and I didn't necessarily feel that way before the Kalshi/PM explosion.
> Uber was a pareto improvement in my view: we are in a better world both for consumers & for low-income wages having ridesharing as a backstop.
Which has led to the interesting phenomenon that a sequence of Pareto improvements (each of which makes everyone better off) has seemed to leave everyone worse off.
Causal evidence indicates that uber entrance raises wages and reduces unemployment among the poorest, even who are not working for uber. Riders also get value.
Uber and Airbnb are unambiguous good for the world?
You might want to look up Barcelona and the issues airbnb causes there. Basically it follows out the cities as you can make way more money doing Airbnb than renting to people living/working there.
As to Uber, I'm not sure if the driver experience is unambiguous good. For some, sure. For the ones that depend on it, I'm sure they'll disagree
> Uber drivers are welcome to no longer drive for uber if they don’t enjoy the experience.
This is obviously a fallacy under our current economic system; workers are not "free to choose whatever job/occupation" they'd like. Their circumstances (material conditions) dictate what they can and cannot do for work, and in some places, driving for Uber is about it, at least for a part time gig that can fit around a primary job (since many Americans at least must work in excess of 50 hours a week to afford food and rent).
So, instead of punching down and saying "man, just get a better job" we could recognize the realities of the world and hope we can make the conditions of drivers better. Uber, or a system like it, at least if we are forced to have car-centric infrastructure, should be a net good. At the moment it is not.
I dunno. This is a job that didn't exist until recently. Society isn't structured around it and I don't think it's punching down to say people can skip that specific job.
It should have more protections too, I'm not arguing against those. I just think "it's the only job some people can get" is often a bad argument. And it's often used to perpetuate bad systems.
Things existing generally can't be ignored as their mere existence can have higher-order effects. For example your landlord can now raise your rent higher and say "why don't you just drive Uber to pay this", and even if he doesn't actually say that, people's extra Uber income still raises the average amount that people can pay for rent, which raises the amount that landlords can charge for rent and still fill their apartments.
That is not at all how it works in practice though. Where I live, Uber has basically fixed the rate of all taxi companies. Effectively, if you order an Uber, you will 80% of the time get a normal taxi, except they earn less.
While it's often a scapegoat for lack of construction, it does contribute to a lack of housing. It's not an unambiguous good, especially when you look at the hosts that have more than 1-2 houses.
Barcelona's at something like 1.2% empty housing and a similar amount of Airbnb locations if these Google results can be trusted. Let's say we want 10% more housing. If shutting down Airbnb would put just 1/4 of those locations on the market, that would be 0.3% of the market or 3% of the goal. That's not a meaningless amount. It's not your flashlight's roughly 0.00000000000001% of 100PWh per full charge.
Also, prices are set on the margins. Everyone who lives there has to pay a competitive rate to AirBNB because otherwise their landlord would just evict them and make it an AirBNB instead.
(Competitive doesn't mean the same price per night - there's also factors of cleaning and occupancy rate)
> Uber drivers are welcome to no longer drive for uber if they don’t enjoy the experience.
Are they?
The drivers have a certain set of capital and skills, and Uber (and to a lesser extent, Lyft) have created a near-monopoly on the market to buy services produced using that capital and skills. Since the ability to execute a transaction in that market is severely compromised if you don't work by Uber's rules, you are effectively outside of the marketplace if you no longer drive for Uber. You make no money. You go broke. You don't have the capital necessary to effectively compete in the market for giving rides in exchange for money. They own your skills and capital in all but the legal sense.
If there were either real, multi-company competition for Uber's market share, or a larger amount of regulation upon their monopoly, it'd be a different story.
Of course, there are people who think that monopolies are good, but that seems to be counterintuitive to anyone with a basic grasp of human nature and history.
Why don't we make another Uber, a third and fourth and fifth Uber until prices converge to the market optimum?
This isn't a rhetorical question. As far as I know there are only two globally - Uber and Lyft. If most of what you need is a web server and a lawyer, shouldn't there be ten of these in every city?
"Car" and "follow GPS" are a set of capital and skills shared by most adults. Uber doesn't own most adults. You're supposed to have marketable skills on top of that.
The skill of knowing all the roads stopped being important a decade or two before Uber even started.
Uber is a major driver of the gig economy and all the lack of worker protections that that includes.
They’re also arguably a major driver/originator of DoorDash and Uber Eats, a company that famously takes an enormous percentage of every restaurant’s order fee, compounding either the increase in costs of restaurant food, or causing restaurants to struggle further or both.
They’ve done good - they’ve made it easier to get a job when you otherwise can’t, and they’ve reduced car reliance for some people; but “unambiguous good” is too far a bridge.
If a restaurant doesn’t like the cut taken by DoorDash they’re welcome to not participate in DoorDash. As far as I know, neither company has ever forced a restaurant into participation.
You're assuming that a sum of a finite number of voluntary transactions adds up to a voluntary system, but this doesn't actually work. The whole is not equal to the sum of its parts.
DoorDash has absolutely added restaurants without consent, the other food delivery apps as well, they call them non partnered listing. California, Colorado, and maybe other states have passed laws against it.
Uber and AirBnB were things we should have taken far more seriously.
That being said, they weren't effectively offering unregulated gambling on any difference of opinion. Gambling is a vice. We've made it a regulated vice, but it's very much still a vice. If you get rid of the "regulated" part, people, including those with the ability to present a case in front of a grand jury, are going to see you as a 1980s cosa nostra capo and act accordingly.
How many billions of dollars in taxes went unpaid? How many overnight accommodation laws were broken? How much consumer harm has occurred due to lack of rights where they might otherwise have redress? Just a few that come to mind.
So Airbnb is responsible for the individual hosts who decide to do something illegal? People have been doing short term rentals for a long time, including online, before Airbnb - what specifically did the company do that was so bad that its the same level as the gambling enabled by Kalshi etc?
This might be a controversial take, but if you take a small cottage industry and make it a consolidated global platform that is growing the practice on purpose by thousands of percentage points, then the platform IS actually responsible.
As for the gambling bits I guess if I had to answer it would be property investors that bought thinking they could rent on AirBnB - speculation but also driving up prices in popular areas to price out locals.
If it is not gambling then it amounts to an unregulated futures market, which is also illegal. There is no way around this for Kalshi/Polymarket, they have broken the law and the only question is which law was broken.
Right, but the point is that we don't just go from popular outrage about a shady business model to "straight to prison". The courts have to untangle the legalities of the shady business model before we can even determine what the charges would be. And that's what they're doing.
People who believe in justice and democracy, or what? We need to hold people accountable for their crimes. Fines and other slaps on the wrist let big tobacco, big ultraprocessed food, and now big gambling to take advantage. What would you do? Wait for the courts? Wait for the corrupt legislature?
Read about the "rule of law," one of the foundational concepts of the US and basically any democracy, as well as most successful monarchies and other forms of government.
Yes, we wait for the courts or the legislature rather than resorting to mob justice. There are good reasons for it. The most obvious is to ensure that the corrupt politicians do not use the power of the state to arbitrarily oppress and persecute people. Another is to ensure that there is no doubt about guilt when we convict someone, and to avoid arguments about the penalties being arbitrary and unfair.
Really though, establishing courts to deal with accusations of people breaking the law is something most societies converge on at some point. "Joe was only ordered to spend 5 years working the fields, so why should Jim be executed for doing the same thing????" amounts to a rudimentary form of judicial law -- pointing to a precedent from a previous case to argue the current case.
I would rather we have plain language legislation than playing this dumb waiting game of "well, I felt like interpreting these 20 laws and 16 cases this way today, and my successors will overturn this with the flick of a pen". It doesnt help that our legislature, and even many of our jurists, are bought out ever since the Citizens United decision.
> I would rather we have plain language legislation
I doubt that you would be happy with the outcome, certainly not if you had to actual deal with such a legal system. Plain language laws sound great in theory, but in practice the result is a rigid system that is easily manipulated by bad actors and which becomes oppressive to honest people.
"No, I am not marketing a tobacco product, I am marketing a product that produces nicotine from other chemicals, then vaporizes it to be inhaled!"
"If I had not done it, my children would have been seriously injured, are you really going to imprison me for protecting them?"
In general, whenever a society tries to apply its legal code, it will begin to develop judicial law by necessity -- at some point you will have to deal with borderline cases where it is not clear if the law was broken, no matter how clear the language of the law might appear. Here is an ancient example taken from the bible: the death penalty shall only be imposed on the basis of testimony from two witnesses. OK, seems pretty clear, but we know from the Talmud that questions arose when the law was applied -- who counts as a witness, what counts as testimony from a witness, etc.
Also keep in mind that no matter how plainly laws are written down, over time you will wind up with a large number of laws as society deals with changing conditions and unforeseen circumstances. Inevitably you wind up with contradictory laws and you do need some process for resolving the contradiction and determining which law should be applied.
I don't understand how we can all look at a clear cut case of violation of the principles of our existing laws and act like, yeah guys, judicial review will just fix this over time, rather than compounding the problems.
The rigidity concept you talk about effectively exists in our current system, too, it's just a matter of perspective. If the law is written in such a poor way so as to need review, and the legislators and executives in on the bill know where the jurists who will review it stand, theyve effectively got the different, rigid law they wanted until someone decides to review again. Review, with no particular cadence, or urgency, etc. I actually do think review is good, but it shouldn't stand in for actual legislation (which since about the 80s it has, largely due to Reagan era deregulation)
Maybe the breakage is somewhere else -- I talked about Citizens United elsewhere, which effectively lets corporations buy votes from legislators, and we know at least 2 of the current justices are flat-out corrupt, getting gifts and financial help from millionaire and billionaire friends.
That is the federal government asserting that Kalshi is subject to federal regulation by the CFTC and not state regulation. It is not an assertion that Kalshi is actually in compliance with futures market regulations, nor is it an assertion that the contracts offered by Kalshi are actually legal (there are explicitly illegal futures contracts).
This would be a great post for Kalshi's lawyers to make. Hard to believe it though. To be clear it is a not a fundamental proposition of the legal system that every illegal activity be tested before it "actually" becomes illegal. It is a business' obligation to not violate the law, not the other way around.
I'm not going to argue the merits of their business model. But the fact that numerous lawsuits have had mixed rulings indicates that there is at least some legal gray area here.
But if you know better then maybe you should just decree from the courtroom in your house and send your ruling to the AGs of all 50 states.
I don't think there are "numerous lawsuits" which have had "mixed rulings" it's really only a subset of the cases that have had anything remotely construable as positive to these companies. And again, that doesn't excuse their behavior. Bold of you to point to one court saying "I'm not sure" when the vast majorities of the others have said "this is perfectly clear, and here's why the other court is wrong"
Like, do you have any actual argument as to why it's not gambling, or are you just going to hang it on this plausible deniability? It's not like they knew the 3rd circuit would decide in their favor anyway, so I don't really think your point is the slam dunk you're acting like it is. They knowingly engaged in activities that most states consider to be gambling. They aren't even really denying that. They are just saying it falls under federal regulation, but the argument for that is so shockingly poor, it's hard to imagine how the 3rd circuit's decision could stand, but its only on a preliminary injunction anyway, so it's still not quite a merits decision. The third circuit said that by its own logic, Congress must weigh in on whether or not "bingo" is a swap regulated by the CFTC. If you can't understand how facially stupid that is, I don't know what to say.
Apparently having a legal discussion that requires nuance is impossible in this forum.
Yes I think what they are doing is illegal and they should not be permitted to operate outside the gaming regulations of individual states.
But it doesn't matter what I think. I was trying to have a conversation about the gray areas and why we don't just send people straight to jail for trying out a new, novel, (and potentially illegal), business model.
The point of my original post, which I think the one youre responding to aligns with, is that we shouldn't have to "wait for the courts to figure it out." Illegal things should be illegal as a matter of the written law, not dicta from jurists. To do that we need legislators that will write narrow laws not influenced by the industry they are regulating, not tied to a poison pill budget proposal, etc...
Weird how your response to me asking you if there was an argument with actual merit is to decry my inability to engage in nuance in a legal discussion (ps I'm an attorney)... Also, it's worth pointing out that it seems like you completely made up the vast majority of your previous post. I guess that's just "nuance?"
>I was trying to have a conversation about the gray areas and why we don't just send people straight to jail for trying out a new, novel, (and potentially illegal), business model.
Actually we do. If a court finds your activity was illegal, you get the according punishment. The court doesn't say "oh gee golly, you're guilty but we'll let you off for this one because who could see it coming!"
>The courts are figuring it out.
The courts figured it out. It does not matter in Utah state court, what the 3rd circuit thinks. It is not binding precedent in Utah state courts.
I think I understand the basics of business and business law in the US. It is disgusting how easy it is to hide behind a corporation or LLC to avoid criminal charges and civil liability.
Limited liability is a concept in all of the developed world. Are you saying it's possible to have a developed society without limited liability? Why should I believe that? Do you just want anarchy or autarky? I feel like you might disagree with more than just limited liability.
I dont have time for the mind games of it all. If someone wittingly did something, or unwittingly but negligently did something, and it caused harm to society, it doesnt matter if theyre an individual acting alone or part of a "corporate identity." That person did the crime and they should be held accountable. Kalshi isnt doing illegal gambling, the directors of the company are.
As much as I am a fan of being able to see the current probability of a future event by checking prediction markets - the argument that there is a meaningful difference between predicting the outcome of a sports game and betting on the outcome of a sports game strains credulity.
That’s not what prediction markets give you though. They give you capital-adjusted, human perception-based odds of future events. You aren’t “seeing the probably of future events”.
You can link me studies that are paid and bought for by these companies all day long. Find me one where the guy is not a consultant to the companies themselves.
> longshots lose 6.3 cents per dollar when each contract is weighted equally but gain 4.1 cents when related contracts are first grouped by parent event; the two-sided pattern is robust in Crypto and Politics but surprisingly absent in Sports.
This seems like a relatively small inefficiency in the markets, no? If the margin of error notable in a prediction markets is <10 cents per dollar, that implies that they are pricing events pretty accurately. Especially post publication of this paper, when sophisticated traders could trade away this inefficiency.
Cowen was talking up prediction markets before they existed. Both kalshi and polymarket were founded because they listened to cowens thoughts on them. He is absolutely a true believer in prediction markets. Whether that makes him trustworthy is a different issue, but he’s not bought and paid for.
The whole “we provide the most accurate way to predict the future” upside-as-a-counterweight-to-the-downside-of-gambling has always seemed like a hollow benefit to me. I mean, like, okay, let’s say they actually do provide that. Who’s to say that’s a beneficial result? Are we really better off having more accurate forecasting of election results? Or does that just improve boogeyman MBA-types’ abilities to affect election results?
Especially since what Kalshi is doing has existed for 25 years in Europe (we call it betting exchange) and been licenced as sports betting. It is nothing new other than them doing it without licence and that they are more generous in accepting weird market types.
So, if there's a difference between the probability that an event happen versus the odds offered on the prediction market, one could simply arbitrage off that and make money without taking risk. Every first year trader at Jane Street or Citadel would learn that. Am I missing something?
Prediction markets' business model is taking transaction fees from contracts between independent counterparties. Kalshi won't go bankrupt no matter how much you make there (though 'people' collectively will make negative [fees + taxes]).
A pyramid scheme uses new investor money to pay fake returns to those who have already invested.
A casino provides games to bet on where expected value for the player is negative. A sportsbook balances their book by modifying the odds to remain as neutral as possible and capture the spread (see ‘vig’).
Probably referring to online gambling specifically. And I would frame it as the folks who promote pyramid schemes are the same as those who promote online gambling.
Personally I’m a fan of the non sports side of these apps, Polymarket in particular. They are putting a financial incentive behind accurately predicting the future, which makes these apps basically the most accurate predictor of the future. Available to anyone to view, for free.
It makes sense why they went towards sports gambling, because the market is so big.
I think this is kind of a naive take. There's a reason why you can't take a license insurance policy out on a stranger. Being able to bet that there will be a wild fire or if a plane will be late creates terrible incentives. It's also a new way to do insider trading.
Most uncertain things that people need to hedge (currency, commodity prices) already had a hedge.
In practical terms can someone really give me an example of how they benefited from knowing the future (materially, not emotionally) from a prediction they got from Kalshi? I am honestly curious.
Most uncertain things that people need to hedge (currency, commodity prices) already had a hedge.
That's way too narrow of the categories. Here are some more cases, and you tell me where can I hedge it? And don't tell me the answer is "go to Goldman Sachs and they create any kind of derivatives to hedge for you", that only works if you are a huge enterprise. I'm talking about SME, or even one person company with $1-5M ARR.
(By the way, I do trade on Polymarket / Kalshi, had a job interview with Kalshi many years ago but did not take their offer since I disagreed a lot with their product design. So all of this is my own opinion).
1. Suppose I run an ice cream shop in midtown Manhattan, and my foot traffic depends on how good the weather is. If it's sunny and dry, I expect a lot of traffic, vice versa, if it's thunderstorm, hurricane or snow, I would run the day without any revenue (and a lot of ice cream waste). What is the way for me to hedge weather risk that could seriously affect my business?
2. Suppose I'm a restaurant owner in Koreatown in LA, and during World Cup I run a restaurant expecting a lot of Korean coming to my area (and my restaurant). So I would ramp up my business, hiring a lot of staffs, sourcing a lot of ingredients from the vendors. Then the biggest risk (and anticipation) is that Korea would be knocked out very early, which unfortunately that precisely happened. So the foot traffic evaporated, and with that the revenue. How could I hedge that risk?
3. Suppose I'm a distributor / reseller who needs to import goods and products from other countries and resells it back to US for profit. Barring the import / export regulations, the biggest risk is tariffs: the orange man can (and did) impose 50% tariffs from China, and all the sudden I face a severe supply-demand imbalance with a lot of contract cancellation and such. How can I hedge such tariff risk from the orange man? (Obviously, the alternative is that I wish we could have elected a more competent leader, but at least 75 million American disagreed with me).
> Most uncertain things that people need to hedge (currency, commodity prices) already had a hedge
What happens when the people with pitch forks come for your derivatives and call it gambling? They did during the 2008 financial crisis. It sounded pretty much exactly like your take here, one abstraction jump away.
Then after they've come for your derivatives, they come for your banks. Because what is a bank except skimming off the top of the company doing the real business?
Then they come for your company. Because what is a companies except skimming off the top of the workers doing the real business?
And then you're standing in that bread queue wondering how it happened, even if it was all 100% predictable.
ah yes the slippery slope that leads from banning prediction markets that didn't exist 10 years ago to banning erm, companies. definitely a guaranteed outcome you should make a bet.
The only one I can think of is, having a better idea of which way the presidential election goes might've been useful for some people, or some other large election. There's a lot of egg on the faces of all these mainstream media polls, which still continues to trigger some people.
So what happens when someone like musk spends a few hundred million to skew what the probability looks like? Suddenly people see that a politician has a 90% chance of winning, and they feel silly voting for the operation?
These are not polling places, they are places for capital to influence odds.
Eh, sounds like the excuse I kept hearing as to why Trump had favorable odds in the last election. Supposedly a foreigner trying to influence our elections, totally not the Democrats kinda not having a candidate. It would be a very expensive (on average) way to probably not make a difference. Cheaper to just buy up some media companies, which do the same thing, saying their preferred candidate is going to win.
Small elections are susceptible to corruption this way, though.
There’s been plenty of blatant voter interference, and billions spent influencing American voters, not really seeing where your point is based. More handles to steer democracy with money is not better, period.
> They are putting a financial incentive behind accurately predicting the future,
Unfortunately they also place a larger financial inventive on influencing the outcome of future events. Or incentivizing corruption within the inner circles of these events. Because the larger financial upside in these transactions is to bet against what the market thinks, and influence the outcome.
I don't think that is logically correct. Commonly perceived probability has been proven frequently wrong whether naturally or due to manipulation. The reasoning here is not exactly the same, but closely aligns to bandwagon fallacy.
It would be interesting to see how frequently Polymarket predictions bet against the most common prediction and by what margins.
It's the least inaccurate way. There's money to be made if you're sure you have a better way. The real problem is we're already seeing these markets influence the outcome.
You make two valid points, but they still do not qualify the validity of these markets as accurate predictors. There is a difference when people, like Berkshire Hathaway really dig into the financials and management of a company to predict its future versus somebody like me who just money on a stock. In one case an investor seeks to make money and actively influence an outcome, but in my case I am just dropping money and hoping it out paces the rise of inflation because banks are no longer reliable stores of financial security.
Polymarket projections do not provide investigative insight, as in the Berkshire Hathaway example. It's just gambling. Any influence drawn from these predictions is incidental and reactive, as opposed to active market forces like buying/selling.
Nobody is saying it's better than stock market predictions of assets and company financials. Though there are some asset price predictions on there that exactly match the traditional markets, so it's no worse.
The range of activities in which this effect can be harnessed for societal good is extremely narrow, but I think it's there.
I'd be in favor of a prediction market for which which asteroids are likely to collide with something, and when. Though we'll have to shut it down once it becomes feasible that somebody might go up and nudge one.
> They are putting a financial incentive behind accurately predicting the future, which makes these apps basically the most accurate predictor of the future.
There is plenty of data that shows they actually don't work very well outside of surfacing insider knowledge (which the commercial prediction markets superficially pretend to be against).
For events where you can't have full picture insider knowledge like elections, prediction markets are pretty awful at accurate predictions.
> They are putting a financial incentive behind accurately predicting the future, which makes these apps basically the most accurate predictor of the future.
This is so fallacious. Putting money behind something doesn't make a prediction of a non-knowable more accurate.
Tarot card readings by a psychic must be more accurate predictor than a tarot card reading by an amateur because professional tarot card readers have a financial incentive to be right, so people continue coming back to them for advice. Getting a tarot card reading therefore makes this basically most accurate predictor!!
Or they're creating a financial incentive for insider trading and manipulating certain events.
I mean look at all the oil market manipulation in the Iran war. The pattern was repeated so many times: short oil, announce a ceasefire deal with imminent on Sunday before the markets open, cash out on Monday, rinse and repeat.
The argument is that we get transparency on what's likely to happen. I don't think there's any evidence of this. I've seen any number of very poor predictions coming from Kalshi and Polymarket. I have also seen some clear manipulation.
> They are putting a financial incentive behind accurately predicting the future, which makes these apps basically the most accurate predictor of the future. Available to anyone to view, for free.
Here, let me predict a future where someone will die. On the other side, let me pay for a hit on the same person. /s
^It's a bit extreme and exaggerated, but it's like that on purpose to make a point.
Utah would probably ban more things if it could (or enforce requirements for participation, like "accredited investor" status), but stock options and commodity futures are both federally regulated. Sports gambling is not, and other things like mention markets also clearly have no conceivable real world utility and are just gambling.
Kalshi is a trading platform. It's been more reliable than the stock market in my experience.
In the times I traded sports contracts, I was able to reverse a trade during the event to prevent a total loss of contract investment, and buy back in if the momentum changed. But usually for the times I bought sports contracts and allowed it to complete, I was outperforming the stock market on a daily basis.
The only stock market trade that outperformed was BWET at the start of the Iran War.
Nobody should ever be threatened with prison time because of a jurisdictional dispute between federal and state governments. That's antithetical to the rule of law, regardless of the specifics of the law or the jurisdictional dispute.
Creating a company with the intent to circumvent the law is definitely something that should be punishable with stricter measures than simply breaking the law directly.
Federal law doesn't always preempt state law, preemption is only applied in certain cases. Given that gambling is traditionally the domain of states to regulate, Kalshi's argument is really dependent on this being "not gambling".
Given that their primary business is literally sports betting -- it's going to be a tough battle.
The only reason it has gone this far is that the current admin's family is personally invested in this bullshit.
It is the same argument that a "sovereign citizen". The "I do not recognize your law" kind of stupidity. The only reason they have not been long in prison is corruption at the highest level at the White House.
They're being threatened with prion time because they broke state law. That the federal government is looking one way while states another is not the cause of the jail time threat.
They should be thrown in prison for knowingly violating a law. Trying to play a semantics game (prediction market vs gambling) to get out of it is just scummy. Everybody knows it is gambling.
We need at least one state to do this when large corporations violate privacy laws.
I have heard and seen: Bet's on the live & fate of a celebrity, person, company, country, weather etc.. It's getting absurdly criminal. You've seen the guy in France burning a weather-sensor, just so he wins a bet. The soldier's knowing their mission and "secretly" betting on the death of their enemies. This is getting beyond dark and unethical. It's maximally anti-social and destructive for humanity.
If Polymarket/Kalshi and co. continue roaming free, we'll eventually see parts of humanity circling a death spiral like ants do.
We're feeling the effects of broad-spectrum gambling addiction. It's hitting our kids. It's hitting our young men. It's hitting our elderly. Restrictions on social media, regulation around gambling and folks trying to drink less are all, it seems, part of a common theme.
Is there any evidence these markets actually provide useful predictions?
Kalshi had Abbot solidly in the lead (polls were closer to final accuracy) until the minute enough votes came in for news orgs' forecasting models to tip the race to Lean D, and then plummeted to 0%.
On balance it seems like they provide little to no uniquely valuable information for anything that matters.
https://kalshi.com/markets/govpartytx/texas-governor/govpart...
We shouldn't be able to bet on bombings and wars, even without considering insider trading
I don't think it takes much boldness, so my condolences to anyone who needs to hem and haw over that decision.
It does raise the question, is waiting for the full picture when the full picture is ruining more lives for not much gain at all to anyone really a good idea?
As to your general point, I agree. We must be bold and say the right words online lest a stranger think we are terrible people because we choose our words to mean things instead of to signal our morality.
If you've somehow missed how these companies act then I'd say you're missing the table stakes to even discuss them: saying they're "everywhere" would not be an overstatement.
Also I don't get why you're clinging to morality as a loincloth: is there a logical reason to allow any of this? Even if you're a lover of all that is vice, we had gambling!
We don't need Kalshi to allow it: they represent a form of gambling that is less regulated, more susceptible to manipulation, more likely to cause unique adverse effects in the real world as people become incentivized manipulate arbitrary events it tracks.
-
You're confusing amorality with objectivity. If you're our resident expert on what words mean, the broadly tolerated concept of moral objectivity shouldn't be foreign.
And it's less contentious to apply it when instead of saying "Gambling is bad", we're saying "Allowing a private company to turn any arbitrary event in the natural world into an always available, poorly regulated, aggressively advertised lottery tickets is bad".
Regardless of if one considers gambling moral, the latter is bad to most logical persons. Ironically the stubbornness with which you're ascribing personal morality to other people for saying that is by far the loudest attempt to signal personal morality in this comment section.
EDIT: Looks like the 9th and 6th circuits have since agreed and rejected Kalshi and CFTC's argument.
Source?
I'm seeing "U.S. District Judge Michael Liburdi in Arizona, a Trump appointee, denied Kalshi's request for a temporary block on Tuesday and ordered the company to demonstrate why the case should be in federal court given the new state charges" [1]. That's quashing a request for a preliminary injunction. Not throwing out the case.
Meanwhile, "federal and state judges in Nevada and Massachusetts, respectively, issued early rulings in favor of states looking to ban Kalshi and its competitor Polymarket from offering sports betting in their states, while federal judges in New Jersey and Tennessee have ruled in favor of Kalshi. The Nevada lawsuit was remanded to state court."
[1] https://www.wlky.com/article/arizona-kalshi-criminal-charges...
It will go to SCOTUS due to the circuit court split.
I highly doubt it, they declined the case so the circuit split will live on for now and most likely be resolved by the legislature via one of the many bills making their way through congress. They could always take it up later but they're not so subtlety signaling that congress needs to make their intent clear on this one.
More likely a wasteful move. Federal preemption is well established.
[1] https://kalshi.com/markets/kxrt/rotten-tomatoes-scores/kxrt-...
I think gambling is defined by the players' behaviour more than the game's structure. There are professional poker players who I would argue do not gamble. They're playing risks as much as an insurance adjuster.
On the other hand, someone investing their life savings into McDonald's meals in an attempt to win a sweepstakes isn't buying burgers.
So the question really is, how many Kalshi and Polymarket users display signs of problem gambling? From what I'm seeing, it isn't negligible [1].
[1] https://newsroom.ucla.edu/in-the-news/la-therapists-are-seei...
Gambling has to do with putting money in a proposition, not with sports. "I bet you I can drink two points before you" is not a financial statement.
In reality, every thing we do in life is a gamble. Even investing in US Treasury Bonds. (And if you don't think so, look at the national debt again.)
I said 'commerce' not 'finance' because finance is just one of many, many things that is within the purview of federal law due the commerce clause.
https://en.wikipedia.org/wiki/Wickard_v._Filburn
That's why subsequent courts walked it back. It was an obviously flawed ruling that produces preposterous results.
I mean, can the government prohibit dying (and throw your corpse in jail) because death means buying less food from others? Can the federal government throw you in jail for not having enough children because that reduces the amount spent on baby clothes?
Imagine there’s a law saying that regulating abortion is federal responsibility and the senate then uses this law as justification to ban demonstrations around abortion clinics. Would that mean that demonstrating next to an abortion clinic counts as abortion?
In what? Source?
CFTC seems to be preëmpting state gambling laws under commodities regulation (specifically, as "excluded commodities"). That sounds, to me, like a major question. The sort Chevron deferred to regulators. The kind our current SCOTUS says should be decided by the Congress. To my knowledge, the Congress has said nothing about prediction markets. Which means it's in the domain of states.
Otherwise, fuck it, let's launch a prediction-market based national health insurance market. I'll sell you a contract that pays my medical bills if I have a health event.
Congress didn't identify the markets it was regulating by common names or trade names. It doesn't matter if its generally called a prediction market, a commodities market, or a futures exchange. What matters is if it qualifies as a Designated Contract Market as per https://www.ecfr.gov/current/title-17/chapter-I/part-38 so if you want to actually have knowledge of what Congress said on this topic your going to have read all of that.
There is already a split decision on this between the 3rd and 9th circuits so it seems likely SCOTUS is going to take this up. I expect they'll be the ones deciding if this in the domain of the states or not. If they don't pick it up then its going to vary by circuit, such that it will be in the domain of some states and not others.
DCMs are a creature of rule, not statute [1]. The statutes that animate it are the CFMA of 2000, Dodd-Frank "special rule" for event contracts and CEA § 5. The core question, whether the CFTC has the authority to regulate this kind of DCM, is still open.
> There is already a split decision on this between the 3rd and 9th circuits so it seems likely SCOTUS is going to take this up
Links to the split opinions?
[1] To be clear, DCMs are undefined in statute. DCMs are just referenced in other statute. Part 38 is an implementing regulation.
Seriously? That is easy to find, so I'm just going to skip past that to the petition to SCOTUS that references both: https://www.supremecourt.gov/DocketPDF/26/26-299/428759/2026...
If that's your only source, I'll rest my case–it make the argument cleanly.
Its seems like there is literally nothing you will accept to show that this isn't settled yet.
To the extent I’m challenging anything above, you’ll see it’s in rejecting anyone claiming this is obvious or settled.
Edit: 2nd circuit denied Kalshi's request for an injunction against NY's enforcement. So yeah... I think I'm within pretty good grounds to reasonably disagree with the 3rd circuit.
Predictions aren't swaps as defined by federal law. If they were, the term "swap" would be so broad that every transaction and exchange of value in the world would be within the CFTC's jurisdiction, excluding those the CEA gives to the SEC.
The only reason the prediction market hasn't already been shut down is because multiple members of the president's family are heavily invested in the industry.
Wall Street has been trying to argue this for ages [1]. To date, it hasn't worked.
[1] https://cdn.ca9.uscourts.gov/datastore/opinions/2025/08/06/2...
So I wouldn’t be surprised under the right social and cultural conditions and the right people in power that it could become regarded as a protected liberty. It is rather frightening that this relativism – deprived of objective anchors and standards – doesn’t strike people as terrifying. Too many people take for granted the status quo they are accustomed to, or they are so fixated on satisfying some appetite du jour that they fail to grasp the waiting Dionysian fallout[0].
[0] https://chs.harvard.edu/primary-source/euripides-bacchae-sb/
My general position has been that the durability of the Bill of Rights is directly attributed to what you call "relativism". When the government finds the Bill of Rights to be unpleasant, they simply decide it never applied in the first place.
This is a matter of whether the state laws violate the constitution.
> place restrictions on gamblers within their borders
This is a matter of if state laws have been preempted by federal laws.
Again these two things are not like each other.
Prediction betting has an argument that truth discovery is economically valuable, but I don't buy it.
If prediction betting was banned, only two businesses would be affected, Kalshi and Polymarket. If futures markets were banned, many businesses would be massively affected, and almost every business would be indirectly affected.
The common language meaning of gambling is too broad and captures things that aren't legally regulated as gambling such as gambling (again common meaning of the word) with futures contracts. Sometimes gambling is dressed up a speculating, but one could argue that one can speculate as a participant in many card games since they allow room for analysis and aren't pure chance. This is what the legal dispute comes down too.
The other is the debate for the value of the truth discovery. Some folks buy it and others don't. SCOTUS will likely take the case to resolve the split between the circuits and we'll if the value of this even enters into the decision or it just comes down interpretation of the statutes.
Awfully rude.
>The common language meaning of gambling is too broad and captures things that aren't legally regulated as gambling such as gambling (again common meaning of the word) with futures contracts.
No it doesn't. No one argues that state gambling laws actually regulate the trade of securities, options, or anything actually covered by the CFTC, so this is a completely sham argument.
>The other is the debate for the value of the truth discovery. Some folks buy it and others don't. SCOTUS will likely take the case to resolve the split between the circuits and we'll if the value of this even enters into the decision or it just comes down interpretation of the statutes.
The value of truth discovery is completely irrelevant to these cases. Either congress intended to regulate sports gambling under the CFTC, or it didn't. The executive branch can't get around that.
This feels like a similar playbook to crypto. People make money through pump and dump schemes and/or luck/speculation. Then they justify their existence as some bastion of decentralized power/coordination.
I think a lot of folks here think I'm debating this because I support prediction markets, but I could have cared less which way SCOTUS comes down on this. Now I'm rooting for Kalshi when SCOTUS picks this up and not regretting the time I spent on this. I try to avoid commenting on anything political, but I had a moment of weakness while I was waiting for benchmarks to run. Thanks!
The event contract isn't tied to the delivery of a good or service.
And this is what I've been trying to get at here... who can actually say with a straight face that congress intended to regulate sports gambling with the CFTC? It's a ridiculous proposition to which there are no actual facts that support it. Nothing in the congressional record, nothing in the statute. Just a broad reading of the language while keeping one's head in the sand.
The reference to bingo was something that New Jersey and the dissent brought up. Direct quote that covers both: 'Because Kalshi’s sports related event contracts are traded on a CFTC-licensed DCM and depend on event outcomes associated with economic consequences, they fit within the Act’s definition of “swaps” subject to the CFTC’s jurisdiction. See 7 U.S.C. §§ 2(a)(1)(A), 1a(47)(A)(ii).
New Jersey and the dissent “pile inference upon inference” and postulate that anything from bingo games to pingpong matches will fall under the CFTC’s jurisdiction.'
from: https://www.courthousenews.com/wp-content/uploads/2026/04/ka...
That the holding opinion addresses, quoting the same exact section you did and then going on to say that "[i]n such far-fetched scenarios, Congress’s express delegation to the CTFC and the Securities and Exchange Commission to 'further define' swaps would prove useful." So yeah, that exact point stands.
>The 3rd circuit literally said they are '"swaps" subject to the CFTC's jusridiction' which is literally the opposite of what the 9th circuit said.
No, the 3rd circuit literally said that the CFTC designated Kalshi a DCM, so therefore it must be the case that its sports events contracts fall under DCM event contracts regulated by the CFTC. This is much more limited than my construction of the 9th circuit holding, which you insisted this is the opposite of it.It's literally not. The 9th Circuit's holding goes much further than to say they aren't a DCM. It says that a sports event can't be an event contract under the CFTC, so it does not even matter if it is a DCM or not.
You had me thinking you read the opinions when you came with the quotes, but it seems like at the same kind of superficial level the 3rd circuit is playing around at here. The 9th Circuit's holding is much broader and addresses the fact that the DCM designation is basically a sham, and clearly well beyond whatever congress could have intended with the statute.
And it's funny that you act informed about this but are playing ignorant the politics of the Trump admin's cronyism with Kalshi and its sudden and unprecedented designation of it as a DCM. Resting in the shallow depth of the 3rd circuit's opinion isn't a good place to be when you really think about what that court represents. And do you really think the supreme court is going to say that the executive branch can decide what congress intended by making designations like that? Fat chance. There's nothing in the congressional record that could ever indicate an intent to give the CFTC power to preempt state sports gambling laws on an individual corporate basis by special designation.
I feel like you're just interested in this for the culture war politics of it and take up the law as a barb. You're just being rude up and down this thread with your intuitive arguments which are really just legal non sequiturs but you don't get that because you don't do actual legal analysis (which is fine, I see all sorts of analyses on this site that I can't do, I just read in those circumstances).
Edit: 2nd circuit denied Kalshi's request for an injunction against NY's enforcement. So yeah... I think I'm within pretty good grounds to reasonably disagree with the 3rd circuit. You really just come off like a buffoon.
2) The CME copper futures contract (/HG) is also physically settled.
/ES futures are used to hedge an SPX position or speculate on SPX. SPX options are also cash settled.
I’m not going to allow you to depose me, if you want to know more about futures contracts, CME and CBOE publish information on all of their futures contracts.
Then I won't ask you what the difference is between speculation and gambling. Instead I'll just declare myself the winner of this debate.
Or they could do the opposite, and just say that apps like this are gambling, which they are, and not a "futures market" that has any real value to society.
By this measure any regulation of a commons is authoritarian. Fortunately, societies with this attitude tend to bee-line their ways to ecological collapse.
"Hedging" is like insurance but the thing you're insuring against is another bet.
I support banning sports gambling/insurance/futures because it is a big onramp for foolish people to maneuver themselves into disastrous financial decisions.
And then they rant about patents! Like it should be easy to come up with a pithy statement that is meant to delineate what should be protectable from what shouldn't for EVERYTHING that has yet to be invented! Like that's a trivial task!
Guess at which level insurance and gambling are regulated?
I know several people that had their lives severely impacted by these things and they were all regular people.
Libertarians are like house cats. They’re convinced of their fierce independence while dependent on a system they don’t appreciate or understand.
Now, I'm willing to accept that people will disagree about what deserves intervention and how much is acceptable. We can bicker about how much retail sports betting, guns, drugs, adult content, etc, etc, should be curtailed, that's fine.
But the hill I will die on is that people, such as yourself, who use a situations like this, where the overwhelming majority will probably want some amount of intervention as a soapbox to peddle intervention into people's private behavior for it's own sake like it's some sort of good default policy are evil at their very core and should be ridiculed, shunned and marginalized for the benefit of us all.
People are acting like we’re going to 1984. No, we’d be going back to the status-quo a few years ago.
We tried the whole “legalize sports betting” thing, really we did. We gave it an honest shot. But it turns out everyone was right all along: it causes a lot of problems for a lot of people, it’s complex legally, and it offers no benefit to society.
But not so much that I'm gonna just let people who got to the same conclusion based on bad ideology and faulty logic off the hook. They're not suddenly not an enemy because they're on the same side of this issue.
Plenty of religious fundamentalists want to see this regulated too. Is their ideology somehow less odious because a blind squirrel has found a nut today?
Same argument around banning hard drugs. They just make society worse. Obviously hard drugs are more clear cut and definitely worse for you, just saying, similar situation in principle.
You think they were fucking gambling on their iPhones in 1890? They weren’t even doing that in 2012! Get real.
Because our regime is corrupt and bought [1]?
[1] https://finance.yahoo.com/markets/options/articles/kalshi-re...
I have given out a certain of points and bubbles in my life under harm reduction programs. These efforts (which I've worked at but not been central to) have had a measurable and positive impact on syphilis rates in rural Colorado among a number of other metrics.
While I think it's not great folks use, the worst parts of many of these things are created by states sanctioning things. People mess their lives up all kinds of ways and creating a black market pretty much just changes the incentive structures. It just makes it more likely folks will do fent because that's what they can find, but if they can't find that they'll drink hand sanitizer.
Unless you think that these folks should kill themselves off using tainted drugs (which was a policy pursued by the US government during alcohol prohibition), then legalization program makes some sense.
Introducing a government monopoly on things like heroin would have a lot of up-sides with the downsides largely being slightly skewed versions what we have right now.
I don't think that marketing heroin in social media apps the way gambling does is a sane idea, but I also don't think gambling apps should be allowed to market themselves.
Like a lot of things, I believe having a government undercut the market for things would have a positive impact, but depending on your view of the relationship between the DEA and the CIA you might think that is already happening but in the worst of all possible ways,
There's already causal inference evidence out there indicating that needle exchange programs reduce rates of HIV and other bloodborne infections, but increase the risk of fatal overdose. If simply making fresh needles more accessible increases overdose rates, I suspect legalizing heroin would have a much larger effect.
But I personally am not sure what the causal relationship between access "clean needles" and "fatally overdosing" is, though I would be interesting in hearing that account.
jfc this is just terminal contrarianism. do we really need to debate whether it's harmful for extremely addictive drugs to be widely available? the Chinese literally fought wars over this
If we can create a situation where those people aren't breaking into cars, stripping the wire out of buildings, or dying in the street - that would be a net positive.
Prohibition has five decades of abject failure under its belt. Try something else.
Straw man. Nobody is calling for banning gambling nationally.
For hard drugs, the expert consensus around harm reduction is supervised injection. Casinos are, in one sense, supervised injection for gambling. Kalshi, on the other hand, is the local dealer selling fentanyl to teens [1].
[1] https://finance.yahoo.com/markets/options/articles/polymarke...
Can you share a link to this? Googling "kalshi athlete deepfake" didn't turn up anything.
Given that gambling, almost by definition, requires exchange of money (or something approximating money), it's much harder for the Kalshi's and Polymarket's of the world to credibly claim that they didn't know a user was in Utah (for at least the ones domiciled in Utah).
They could take payment only in crypto, but I suspect that you can't run a federally-regulated commodities futures exchange without a certain amount of KYC (if for nothing other than AML and income reporting) that makes it practically infeasible to pretend you didn't know.
The other law was about porn that I guess wasn't always paid for, so yeah.
I think gambling should be legal, but should be illegal to advertise. Just like the government settled with the tobacco companies to restrict advertising, we should do the same with gambling companies. No advertising.
It's hard to regulate advertising when the store itself is the ad.
When I lived there online poker and day trading was the extent that what seemed like a smallish fraction of the population was into. Though a lot of people watched poker.
Now it seems like there is a whole generation of people betting on everything from football to heads of state getting removed from office.
Also, my understanding is throwing sporting event is normalized. I saw a football highlight where a receiver basically ran out of bounds when he could have easily scored. It looked sketchy asf.
As for Kalshi, if it’s not gambling what is it. I’m not buying the derivative framing. There is frequently no underlying asset to own and no way to apply mosaic theory. So it’s gambling in my book. I don’t feel sorry for Kalshi’s founders for the Utah AG throwing the book at them.
In the 2010s the TV networks normalized fantasy sports into sports betting. The vehicle they used for this was through the 45 second commercial advertising breaks that run every 2 minutes during American football games, and then across the other important American sports thereafter. If you were a regular watcher of sports in the US you've been brainwashed over the last 10 years into thinking this is ok. Some are aware of this, many are not.
they were never an innovating marketing play... it was the culmination of a gambling company committing to regulatory capture as evinced by Donald Trump Jr (totally not) sitting on BOTH BOARDS as a "paid strategic advisor" or whatever lie they want to spin.
To me it's absolutely crazy that the "gamble on anything" apps are being advertised as some kind of polling software. I've already seen at least one race called into question because the gamblers bet on the wrong pony.
They're pure corruption engines designed for insider betting. The top brass of these companies need to be made example of.
i would not premise an anti-prediction market argument on their accuracy being bad, you are building on shaky foundations. the better argument is the paternalist protecting stupid people from themselves imo.
is there any surprise then that Trumps are on the boards of both?
Here is their official stance on gambling: https://www.churchofjesuschrist.org/study/manual/gospel-topi...
I am not sure how much, if any, impact or influence this has had on Utah law.
Given the way that the church has explicitly encouraged state legislators to shoot down recent laws it's not surprising to think they'd be pushing for this.
Also it's the only time I've seen nonaffiliated news articles about a statement the church has made about a topic other than lgbtq rights or abortion - notably much more politicized topics in general. That may be due to my own inattentiveness however.
All that to say that calling it "the main topic" is incorrect in technicality, but not in impact imo.
And the way they've influenced voters in Idaho and Arizona recently.
... Gambling is motivated by a desire to get something for nothing. This desire is spiritually destructive. It leads participants away from the Savior’s teachings of love and service and toward the selfishness of the adversary. It undermines the virtues of work and thrift and the desire to give honest effort in all we do.
Those who participate in gambling soon discover the deception in the idea that they can give little or nothing and receive something of value in return. They find that they give up large amounts of money, their own honor, and the respect of family members and friends. Deceived and addicted, they often gamble with funds they should use for other purposes, such as meeting the basic needs of their families. Gamblers sometimes become so enslaved and so desperate to pay gambling debts that they turn to stealing, giving up their own good name.
Like, are there some gamblers who, if it were made illegal, would do it illegally in harmful ways? Yes! Are there enough such people that the social harms of banning gambling would be significant? I don’t think the data bears that out. This isn’t prohibition; this is something that has already been widely proscribed by law in the past without serious negative consequences (other than missed opportunities for riches on the part of the gambling companies that pushed to relax those prohibitions over the last decade).
https://leg.wa.gov/state-laws-and-rules/washington-state-con...
>SECTION 24. LOTTERIES AND DIVORCE
>The legislature shall never grant any divorce. Lotteries shall be prohibited except as specifically authorized upon the affirmative vote of sixty percent of the members of each house of the legislature or, notwithstanding any other provision of this Constitution, by referendum or initiative approved by a sixty percent affirmative vote of the electors voting thereon. [AMENDMENT 56, 1971 Senate Joint Resolution No. 5, p 1828. Approved November 7, 1972.]
>NOTES: Original text — Art. 2 Section 24 LOTTERIES AND DIVORCE — The legislature shall never authorize any lottery or grant any divorce.
Everyone knows the state of Utah is largely run by the church.
Surprisingly few people know this ime. It's worth pointing out as one of the few areas [0] where the church has as much pull as its members think it does.
While I wouldn't look to the church as a bastion of morality for So Many Reasons, it's worth looking at a hard example of how it is able to manipulate politics in Utah, and by extension nationwide.
[0] Other areas worth being aware of are Idaho and parts of Arizona of course.
Now, Robinhood is a brokerage, regulated by FINRA, and has been fined for misbehavior in the past. So I am more than willing to believe that there is daylight here that I’m not seeing. But anything that lets you speculate attracts a certain clientele, and I think the most important distinction is whether or not the platform itself is an interested party.
Lots of folks gripe about how Kalshi adjudicates contracts.
Also speculators serve an important purpose: hedging strategies require speculators on the other side. It is not just a "certain clientele," there are people who run profitable businesses on speculation (it amounts to collecting insurance premiums from people who want hedges).
As an excluded commodity. Based on the CFTC's own rule making. Based on this logic the SEC can go back to deciding it gets to regulate anything as securities fraud.
Really it sounds like this is a disagreement about what it means for a market to be "regulated" -- I draw the line at compliance, you seem to draw the line elsewhere.
The CFTC was created to hedge real risk. Onions iirc?
Kalshi creates risk where there was none before. The 'future' on the 'commodity' of 'number of dunks by an aging shaq at a halftime show'.
Courts have taken the dimmest possible view of this legal fabrication and I expect their losses in courts to continue without direct intervention by the Trump scions.
&&
policy makers, assistants, journalists, and the like are insider trading - and the president of the united states is intentionally market manipulating for profit
Bots Rule Everything Around Me BREAM dollar dollar bill yall.
like, of course the gambling halls drop big money on online marketing
And it's terrible and going to destroy sports.
With enough funds, smaller political races can be gamed.
If you either (a) treat it like gambling or (b) don't participate at all because you think it is gambling, then I am sorry for your sake.
You have lots of recourse if you lose money through your stock broker. Kalshi, on the other hand, is less regulated than a casino.
Of course there is. If the broker improperly evaluated your suitability to trade options, you'd be able to–at the very least–cost them tens of thousands of dollars in compliance costs. In all likelihood, a retail investor taking their broker to FINRA arbitration has even odds of prevailing.
And even in the extreme case that you did file a claim and you were awarded damages it would probably be only for a fraction of what you lost
What are you basing this on?
Sure. What are you looking at?
> common sense
There's your problem.
> real world experience with options trading
Did you ever take anything to arbitration?
For what it's worth, former options market maker here.
The number seems very small compared to the sheer number of retail investors that lose money on options and a lot of these don't even go in favor of the complaintant either.
Just to clarify I'm not talking about somebody doing some sort of complex options play that ends them up in debt when they are 17 years old or something like that.
I'm talking about the average case where somebody signs up for a brokerage account, funds the account, accepts the disclaimers and fills out the questionnaire to do options, is approved for level one, buys some call options, and they all go to zero. Why should they get their money back?
Most retail investors don't complain. And most brokerages settle before going to arbitration, because the win rates aren't great and either way it winds up on your record.
> I'm not talking about somebody doing some sort of complex options play
Those are actually more likely to go against the investor. Someone making an over-leveraged nonsense play is more sympathetic. (Or, investor was an idiot but broker failed to file a trade report on time or sent a stupid text or whatever.)
> Why should they get their money back?
Big question. Simpler: they do. A quarter to a third of cases between '21 and '26 resulted in customer awards, per your source.
Right, only a quarter, and that is just any award, it could be 10% of what they lost
Sure. It’s still (a) a huge pain in the ass for the broker and (b) more than anyone will get from Kalshi.
Somebody needs to tell Utah it needs to change its laws to adapt to their business plan, ASAP.
Granted, the son whose wedding you skip has got to be lower down the food chain.
If you have advance knowledge of an attack, there are much less conspicuous ways to profit off that.
What about this administration makes you think that's important to them?
it is true that a smart operator may like to profit only in the less conspicuous way, but what would cause you to think that applied to Trump and his family?
I despise gambling and would very like if there was less of it. But that's not a legal opinion, those are just my feelings. There are good faith legal arguments that these state laws cannot override federal laws and that the federal laws allow these prediction markets. We live in a country with an enormously complex legal system and with a volume of legislation that is, without question, far beyond what any single individual could reasonably comprehend. This often means that what is legal and illegal is unclear. I think this is one of those circumstances.
all of this stuff is very obviously sports betting. Kalshi can say the piss on our pantlegs is rain, but I don't feel very obligated to belive it. I recognize the legal argument, I personally think it's bunk, I think it's reasonable for a legislator to say it's bunk, and it is hardly settled to say that Utah can't do this.
In fact, we rewound to, say like 2010, this would be completely obvious that Utah is correct.
I haven't read the CFTC Act of 1974, but I've read opinions of respected lawyers and legal scholars on this issue and there doesn't seem to be a consensus. I think there's a good chance this one goes to the supreme court. SCOTUS doesn't usually weigh in on things that are "facially ridiculous."
It seems many people seem to think our justice system is now just a sham, but I think that at present, despite its many flaws, it is by far the most well functioning branch of our government and that more often than not, the courts are making a good faith effort to do a difficult task.
If I were god-king would I make legislation to ban prediction markets for sports events and such? Without question. Is it obvious to me that our current set of laws does not grant the CFTC jurisdiction over this? I guess not.
* laws that ought to exist
* how existing laws ought to be interpreted
* whether a given interpretation is correct
* whether a given interpretation is good
and that the court attempts to interpret and apply laws, not create them? And the legislature can just change laws if they don't like what the court does?
Just because some highly compensated lawyers, and some who wish Kalshi would butter their bread, throw some dust in the air doesn't mean we have to strap on a dunce cap and pretend a bet on the superbowl is really a commodity future. We don't even have to pretend that's a reasonable opinion to have.
Kalshi has a serious uphill battle here. As the Judge said in granting Utah's motion and delying Kalshi's motion for a preliminary injunction:
> Shelby determined the text of US law makes it clear that state regulation is not forbidden. US law states that CFTC jurisdiction does not “supersede or limit the jurisdiction conferred on courts of the United States or any State,” and “explicitly provides for State regulation of its gaming laws in all but a few specified cases,” he wrote.
> “Congress is aware that some States permit gambling while others do not, and the CEA explicitly provides for State jurisdiction,” Shelby wrote.
Judge Shelby’s interpretation quoted above seems in conflict with how the 3rd circuit ruled in Kalshiex v. Flaherty, which is why I think the law is not entirely clear yet. I would be surprised if SCOTUS eventually weighs in
This is a bad take. What they are doing is quite obviously legal right now. Federal law trumps state law and the feds have an opinion, despite being weird and controversial.
There are a number of ongoing legal battles about the federal laws but until they work their way through the courts, it's "legal". Also, it could all get resolved with a new presidential administration in two years. This is the correct solution.
We shouldn't cheer for personal prosecutions over definitionally legal activity. Nothing good will come of it. See also: Sending mifepristone across state lines, or traveling out of state for abortions.
Federal law does not categorically trump state law.
https://en.wikipedia.org/wiki/Federal_preemption
Whether pre-emption applies in this case depends on whether the courts accept Kalshi/Polymarket's claim that they operate a futures trading platform, not a gambling platform. If and only if that claim is accepted is there a pre-emption argument, and only then would the opinion of the Commodity Futures Trading Commission be relevant.
As long as the business is legal to operate, there is no justification for criminally prosecuting the people engaged in that business.
"As long as the business is legal to operate, there is no justification for criminally prosecuting the people engaged in that business."
You are begging the question: assuming that the business is legal to operate in the state of Utah. You keep presenting Kalshi's arguments as though they enjoy some presumption of legality prior to a ruling.
"until they work their way through the courts, it's "legal"" is a much better phrasing and if the comment had stuck to that it probably wouldn't be downvoted.
No. There's no "states must permit gambling" Federal law for state bans to conflict with currently; states are free to ban it.
https://en.wikipedia.org/wiki/Gambling_in_the_United_States
"While gambling is legal under U.S. federal law, there are significant restrictions pertaining to interstate and online gambling, as each state is free to regulate or prohibit the practice within its borders."
The Second Amendment isn't even really Federal law, nor is the rest of the Constitution. It's the supreme law that sits above Federal/state law and constrains what Federal/state laws can do.
(And the Tenth Amendment protects state laws significantly from Federal laws, where applicable.)
Matt Levine has gone into great detail about the legal chicanery that brought us here, but it summarizes as "it's not gambling, it's futures trading".
This seems like nonsense to you and me (and Matt Levine), but our opinions are irrelevant here. The courts' opinions are, and so far they've been coming down on the side of the prediction markets. Mostly.
So by definition - as weird as it is - it's legal. So far.
Sure, just like storing a bunch of classified docs in a Mar-a-Lago bathroom was.
You are mixing up "currently getting away with it" for legal.
Courts move slow, especially when the party being targeted has a lot of money. Them allowing Kalshi to operate isn't an endorsement, it just means they don't see what Kalshi is doing as a significant harm. The injunction to stop them from operating in Utah is still winding it's way through appeals.
Whether or not what they are doing is legal is not determined until they either settle, Utah drops the case, or the trail and appeals process determines that they are not guilty.
Obviously not. You know how you can tell? Police will stop you from doing it.
"Kalshi and its co-founders face felony charges" would seem to describe that process, yes? The same first step a fentanyl dealer would encounter?
Swap out "selling fentanyl" for widely tolerated but often still illegal jaywalking if you like.
I don't think your fentanyl dealer will receive the same treatment. They aren't even taking away the "drugs" from Kalshi.
Police will stop you from recording them, is that illegal?
Cops don't show up for civil offenses and most criminal offenses (particularly white collar offenses). Cops are also notoriously bad at understanding the law. Funnily, an illegal arrest is a good example of where the cops don't show up to arrest someone for breaking the law.
You are using faulty logic to determine what is and isn't legal.
Even if you are a state legislator, and federal courts are mixed, you should write the law to raise the issue salience and get the federal law tweak.
Courts really are not the end-all-be-all when we're talking about legislators making laws, that's silly.
The Fugitive Slave Acts were two of these conflicts. The first one overruled any state that offered sanctuary while also making it a federal crime to assist runaways. The second one aggravated tensions between slave states and the rest of America. Under the Fugitive Slave Act of 1850, it was not legal for a suspected runaway slave to deny being the slave described in the paperwork. States were required to assist slave catchers. Also, suspected runaway slaves were not permitted any sort of trial. It legalized kidnapping any black person who vaguely fit the description on the paperwork.
https://en.wikipedia.org/wiki/Fugitive_Slave_Act_of_1850
Prior to the Commodities Futures Modernization Act of 2000, some states regulated credit default swaps as insurance products while some state's statutes said that CDS were gambling (and outlawed it completely). The CFMA overruled the states that had outlawed CDS. This was one of the major causes of the 2007/2008 financial meltdown.
https://en.wikipedia.org/wiki/Commodity_Futures_Modernizatio...
Closes tab.
These founders should be in prison for promoting illegal gambling. Same federal charges mafiosos get caught on for a "friendly card game".
Thankfully that part of the law didn't stand under closer inspection. As anyone on this website should know, it's technically impossible to identify all VPN users or geolocate VPN users behind their VPN. Anyone can set up a VPN on a raspberry Pi and leave it at a friends' house in another state. Under the law they tried to pass, adult websites would be liable for this.
The legislation in my example wasn't a hypothetical slippery slope. It actually passed. This was part of what they were trying to regulate.
You don’t even have to read the article, the headline says it all…
We play this game on HN every time anyone is charged. When Holmes was being sentenced there were still folks on here who were convinced (with zero research or evidence, of course, just vibes) it was a scam.
As far as what the current state of the world tells you, what would you have done then? Should Utah have dispatched assassins? They are taking the leaders of the company to criminal court. I can't believe I have to stand up for Utah here.
There are many more steps in the justice system where they could get off easy, and there’s plenty of precedent for that.
I would amend your “breaking the law” comment to “willfully ignoring all regulation, taxes, and labor provisions” perhaps but, same sentiment.
A lot of these companies have taken this approach. Break laws until someone finally notices AND does something about it. The runway to a slap on the wrist is often times more financially beneficial to companies - there is no incentive to stop if you run a billion dollar company and breaking the law gets you a $50M dollar fine you make back in a single month.
I thought SOX (Sarbanes–Oxley Act) was supposed to prevent a lot of this, but I guess companies just continue to find loopholes to exploit.
On the other hand, I've come around to the view that sports betting is a net unqualified bad -- and I didn't necessarily feel that way before the Kalshi/PM explosion.
Which has led to the interesting phenomenon that a sequence of Pareto improvements (each of which makes everyone better off) has seemed to leave everyone worse off.
How the hell is that leaving everyone worse off?
You might want to look up Barcelona and the issues airbnb causes there. Basically it follows out the cities as you can make way more money doing Airbnb than renting to people living/working there.
As to Uber, I'm not sure if the driver experience is unambiguous good. For some, sure. For the ones that depend on it, I'm sure they'll disagree
Uber drivers are welcome to no longer drive for uber if they don’t enjoy the experience.
This is obviously a fallacy under our current economic system; workers are not "free to choose whatever job/occupation" they'd like. Their circumstances (material conditions) dictate what they can and cannot do for work, and in some places, driving for Uber is about it, at least for a part time gig that can fit around a primary job (since many Americans at least must work in excess of 50 hours a week to afford food and rent).
So, instead of punching down and saying "man, just get a better job" we could recognize the realities of the world and hope we can make the conditions of drivers better. Uber, or a system like it, at least if we are forced to have car-centric infrastructure, should be a net good. At the moment it is not.
It should have more protections too, I'm not arguing against those. I just think "it's the only job some people can get" is often a bad argument. And it's often used to perpetuate bad systems.
(Competitive doesn't mean the same price per night - there's also factors of cleaning and occupancy rate)
Are they?
The drivers have a certain set of capital and skills, and Uber (and to a lesser extent, Lyft) have created a near-monopoly on the market to buy services produced using that capital and skills. Since the ability to execute a transaction in that market is severely compromised if you don't work by Uber's rules, you are effectively outside of the marketplace if you no longer drive for Uber. You make no money. You go broke. You don't have the capital necessary to effectively compete in the market for giving rides in exchange for money. They own your skills and capital in all but the legal sense.
If there were either real, multi-company competition for Uber's market share, or a larger amount of regulation upon their monopoly, it'd be a different story.
Of course, there are people who think that monopolies are good, but that seems to be counterintuitive to anyone with a basic grasp of human nature and history.
This isn't a rhetorical question. As far as I know there are only two globally - Uber and Lyft. If most of what you need is a web server and a lawyer, shouldn't there be ten of these in every city?
The skill of knowing all the roads stopped being important a decade or two before Uber even started.
Uber is a major driver of the gig economy and all the lack of worker protections that that includes.
They’re also arguably a major driver/originator of DoorDash and Uber Eats, a company that famously takes an enormous percentage of every restaurant’s order fee, compounding either the increase in costs of restaurant food, or causing restaurants to struggle further or both.
They’ve done good - they’ve made it easier to get a job when you otherwise can’t, and they’ve reduced car reliance for some people; but “unambiguous good” is too far a bridge.
If a restaurant doesn’t like the cut taken by DoorDash they’re welcome to not participate in DoorDash. As far as I know, neither company has ever forced a restaurant into participation.
DoorDash got sued by In-N-Out for doing this. https://www.eater.com/2015/11/11/9714840/in-n-out-doordash-d...
The parent comment was complaining about the fee that DoorDash charges the restaurant.
Is that link going tell me that DoorDash was charging restaurants non consensually? That would be very tough for me to believe
That being said, they weren't effectively offering unregulated gambling on any difference of opinion. Gambling is a vice. We've made it a regulated vice, but it's very much still a vice. If you get rid of the "regulated" part, people, including those with the ability to present a case in front of a grand jury, are going to see you as a 1980s cosa nostra capo and act accordingly.
As for the gambling bits I guess if I had to answer it would be property investors that bought thinking they could rent on AirBnB - speculation but also driving up prices in popular areas to price out locals.
The problem lies in the legal gray area of what constitutes gambling, and therefore "illegal" gambling. That's what the courts have to decide.
I think most people would say this is gambling. But our legal system has to rule on that before we can start putting people in jail for it.
We should! Finally incentivize rich people to not screw over the rest of society for a quick buck.
Yes, we wait for the courts or the legislature rather than resorting to mob justice. There are good reasons for it. The most obvious is to ensure that the corrupt politicians do not use the power of the state to arbitrarily oppress and persecute people. Another is to ensure that there is no doubt about guilt when we convict someone, and to avoid arguments about the penalties being arbitrary and unfair.
Really though, establishing courts to deal with accusations of people breaking the law is something most societies converge on at some point. "Joe was only ordered to spend 5 years working the fields, so why should Jim be executed for doing the same thing????" amounts to a rudimentary form of judicial law -- pointing to a precedent from a previous case to argue the current case.
Yes. This is what we do in the United States and most of Western Europe. This is how countries like this function
I doubt that you would be happy with the outcome, certainly not if you had to actual deal with such a legal system. Plain language laws sound great in theory, but in practice the result is a rigid system that is easily manipulated by bad actors and which becomes oppressive to honest people.
"No, I am not marketing a tobacco product, I am marketing a product that produces nicotine from other chemicals, then vaporizes it to be inhaled!"
"If I had not done it, my children would have been seriously injured, are you really going to imprison me for protecting them?"
In general, whenever a society tries to apply its legal code, it will begin to develop judicial law by necessity -- at some point you will have to deal with borderline cases where it is not clear if the law was broken, no matter how clear the language of the law might appear. Here is an ancient example taken from the bible: the death penalty shall only be imposed on the basis of testimony from two witnesses. OK, seems pretty clear, but we know from the Talmud that questions arose when the law was applied -- who counts as a witness, what counts as testimony from a witness, etc.
Also keep in mind that no matter how plainly laws are written down, over time you will wind up with a large number of laws as society deals with changing conditions and unforeseen circumstances. Inevitably you wind up with contradictory laws and you do need some process for resolving the contradiction and determining which law should be applied.
The rigidity concept you talk about effectively exists in our current system, too, it's just a matter of perspective. If the law is written in such a poor way so as to need review, and the legislators and executives in on the bill know where the jurists who will review it stand, theyve effectively got the different, rigid law they wanted until someone decides to review again. Review, with no particular cadence, or urgency, etc. I actually do think review is good, but it shouldn't stand in for actual legislation (which since about the 80s it has, largely due to Reagan era deregulation)
Maybe the breakage is somewhere else -- I talked about Citizens United elsewhere, which effectively lets corporations buy votes from legislators, and we know at least 2 of the current justices are flat-out corrupt, getting gifts and financial help from millionaire and billionaire friends.
Until a judge says it's a crime, it isn't. Innocent until proven guilty etc
https://www.cftc.gov/PressRoom/PressReleases/9281-26
Why are casinos operated by Native Americans legal but casinos operated by black people illegal?
I don't think "illegal gambling" is illegal for the reasons you want it to be illegal.
You might want to look up what the reservations are, legally speaking
But if you know better then maybe you should just decree from the courtroom in your house and send your ruling to the AGs of all 50 states.
Like, do you have any actual argument as to why it's not gambling, or are you just going to hang it on this plausible deniability? It's not like they knew the 3rd circuit would decide in their favor anyway, so I don't really think your point is the slam dunk you're acting like it is. They knowingly engaged in activities that most states consider to be gambling. They aren't even really denying that. They are just saying it falls under federal regulation, but the argument for that is so shockingly poor, it's hard to imagine how the 3rd circuit's decision could stand, but its only on a preliminary injunction anyway, so it's still not quite a merits decision. The third circuit said that by its own logic, Congress must weigh in on whether or not "bingo" is a swap regulated by the CFTC. If you can't understand how facially stupid that is, I don't know what to say.
Yes I think what they are doing is illegal and they should not be permitted to operate outside the gaming regulations of individual states.
But it doesn't matter what I think. I was trying to have a conversation about the gray areas and why we don't just send people straight to jail for trying out a new, novel, (and potentially illegal), business model.
The courts are figuring it out.
>I was trying to have a conversation about the gray areas and why we don't just send people straight to jail for trying out a new, novel, (and potentially illegal), business model.
Actually we do. If a court finds your activity was illegal, you get the according punishment. The court doesn't say "oh gee golly, you're guilty but we'll let you off for this one because who could see it coming!"
>The courts are figuring it out.
The courts figured it out. It does not matter in Utah state court, what the 3rd circuit thinks. It is not binding precedent in Utah state courts.
https://marginalrevolution.com/marginalrevolution/2026/10/pr...
Obviously not compelling on its own though.
This seems like a relatively small inefficiency in the markets, no? If the margin of error notable in a prediction markets is <10 cents per dollar, that implies that they are pricing events pretty accurately. Especially post publication of this paper, when sophisticated traders could trade away this inefficiency.
I'm sure Trump Jr's role/stake in both Kalshi and Polymarket has nothing to do with it.
A pyramid scheme uses new investor money to pay fake returns to those who have already invested.
A casino provides games to bet on where expected value for the player is negative. A sportsbook balances their book by modifying the odds to remain as neutral as possible and capture the spread (see ‘vig’).
There’s not a whole lot of similarity there.
It makes sense why they went towards sports gambling, because the market is so big.
Most uncertain things that people need to hedge (currency, commodity prices) already had a hedge.
In practical terms can someone really give me an example of how they benefited from knowing the future (materially, not emotionally) from a prediction they got from Kalshi? I am honestly curious.
That's way too narrow of the categories. Here are some more cases, and you tell me where can I hedge it? And don't tell me the answer is "go to Goldman Sachs and they create any kind of derivatives to hedge for you", that only works if you are a huge enterprise. I'm talking about SME, or even one person company with $1-5M ARR.
(By the way, I do trade on Polymarket / Kalshi, had a job interview with Kalshi many years ago but did not take their offer since I disagreed a lot with their product design. So all of this is my own opinion).
1. Suppose I run an ice cream shop in midtown Manhattan, and my foot traffic depends on how good the weather is. If it's sunny and dry, I expect a lot of traffic, vice versa, if it's thunderstorm, hurricane or snow, I would run the day without any revenue (and a lot of ice cream waste). What is the way for me to hedge weather risk that could seriously affect my business?
2. Suppose I'm a restaurant owner in Koreatown in LA, and during World Cup I run a restaurant expecting a lot of Korean coming to my area (and my restaurant). So I would ramp up my business, hiring a lot of staffs, sourcing a lot of ingredients from the vendors. Then the biggest risk (and anticipation) is that Korea would be knocked out very early, which unfortunately that precisely happened. So the foot traffic evaporated, and with that the revenue. How could I hedge that risk?
3. Suppose I'm a distributor / reseller who needs to import goods and products from other countries and resells it back to US for profit. Barring the import / export regulations, the biggest risk is tariffs: the orange man can (and did) impose 50% tariffs from China, and all the sudden I face a severe supply-demand imbalance with a lot of contract cancellation and such. How can I hedge such tariff risk from the orange man? (Obviously, the alternative is that I wish we could have elected a more competent leader, but at least 75 million American disagreed with me).
What happens when the people with pitch forks come for your derivatives and call it gambling? They did during the 2008 financial crisis. It sounded pretty much exactly like your take here, one abstraction jump away.
Then after they've come for your derivatives, they come for your banks. Because what is a bank except skimming off the top of the company doing the real business?
Then they come for your company. Because what is a companies except skimming off the top of the workers doing the real business?
And then you're standing in that bread queue wondering how it happened, even if it was all 100% predictable.
Also notice that all those things I gave as examples actually happened. Multiple times.
These are not polling places, they are places for capital to influence odds.
Small elections are susceptible to corruption this way, though.
Unfortunately they also place a larger financial inventive on influencing the outcome of future events. Or incentivizing corruption within the inner circles of these events. Because the larger financial upside in these transactions is to bet against what the market thinks, and influence the outcome.
It would be interesting to see how frequently Polymarket predictions bet against the most common prediction and by what margins.
Polymarket projections do not provide investigative insight, as in the Berkshire Hathaway example. It's just gambling. Any influence drawn from these predictions is incidental and reactive, as opposed to active market forces like buying/selling.
Do we want an accurate public prediction of events with national security implications?
Most of the things we actually need to predict (winner of the Superbowl not among them) already have large and liquid financial markets behind them.
I'd be in favor of a prediction market for which which asteroids are likely to collide with something, and when. Though we'll have to shut it down once it becomes feasible that somebody might go up and nudge one.
There is plenty of data that shows they actually don't work very well outside of surfacing insider knowledge (which the commercial prediction markets superficially pretend to be against).
For events where you can't have full picture insider knowledge like elections, prediction markets are pretty awful at accurate predictions.
This is so fallacious. Putting money behind something doesn't make a prediction of a non-knowable more accurate.
Tarot card readings by a psychic must be more accurate predictor than a tarot card reading by an amateur because professional tarot card readers have a financial incentive to be right, so people continue coming back to them for advice. Getting a tarot card reading therefore makes this basically most accurate predictor!!
I mean look at all the oil market manipulation in the Iran war. The pattern was repeated so many times: short oil, announce a ceasefire deal with imminent on Sunday before the markets open, cash out on Monday, rinse and repeat.
The argument is that we get transparency on what's likely to happen. I don't think there's any evidence of this. I've seen any number of very poor predictions coming from Kalshi and Polymarket. I have also seen some clear manipulation.
We should call this what this is: gambling.
Here, let me predict a future where someone will die. On the other side, let me pay for a hit on the same person. /s
^It's a bit extreme and exaggerated, but it's like that on purpose to make a point.
Even insurance is similar, Kalshi markets can be used as a form of insurance.
Yet AFAIK Utah doesn't ban either of those.
In 2018, SCOTUS ruled sports gambling was the domain of the states.
Like a resort hedging their income against bad weather.
Or a sports bar hedging their city's team getting knocked out of a tournament early.
And that's the part where you ask yourself, "I wonder why that is?" and "Do my analogies parallel reality as much as I currently think they do?"
Or I can cut to the chase: cut the crap, it's gambling and you know it. Semantic pedantry isn't going to convince anyone to the contrary.
In the times I traded sports contracts, I was able to reverse a trade during the event to prevent a total loss of contract investment, and buy back in if the momentum changed. But usually for the times I bought sports contracts and allowed it to complete, I was outperforming the stock market on a daily basis.
The only stock market trade that outperformed was BWET at the start of the Iran War.
If the federal government says it's not gambling, then does a state get to say it is?
States can't just override federal law with their own laws.
Given that their primary business is literally sports betting -- it's going to be a tough battle.
The only reason it has gone this far is that the current admin's family is personally invested in this bullshit.
In addition to being utterly terrifying, this would fall afoul of the "cruel and unusual punishments" thing /s
(What a typo)