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They also place their own bets within their own market. They don't just make money on trading fees.
A different entity provides liquidity. There’s no house like in sportsbooks.
Does this ban the prediction markets that don’t use real money but instead tokens that are worthless?
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I think sports betting is a lot less harmful than prediction markets. With sports betting if someone throws a game to get a pay day, for instance, the only real consequence is on the reputation of the sport. In prediction markets, people can do all sorts of awful things to make money as insiders..
First, over 90% of the wagers on Polymarket and Kalshi are already on sports (quoting John Oliver's Last Week Tonight on that one). Despite the headlines, Kalshi and Polymarket are mainly just sportsbooks. Second, while yes, some of the markets available on prediction markets can push people to do awful things, there are plenty that are harmless. I'm cherry picking to make an extreme point, but I would so much rather…
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There’s no “house” or “book” aspect to Kalshi. They are nothing more than contracts that are bought and sold between individuals.
Lots of types of contracts bought and sold between individuals are prohibited by law.
as the article notes, prediction markets are regulated by the CFTC as a commodities futures contract, so I'm not sure how any state law survives a federal pre-emption challenge. On the other hand, it's a little unusual to see a federal agency suing to protect its turf. Would've expected a class action by a Minnesota user of the service to bring the challenge instead.
I'm curious to see how this works out, because sports betting is _not_ in the CFTC's remit, and Kalshi etc's argument that states can't regulate them because they're not technically sports betting is contrary to the spirit of the law
It would be good if they banned Learing Centers.
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> Sure, but that's not really an argument to ban prediction markets, it's an argument to regulate what the public can or cannot bet on. I wasn't making any argument above in either way. But the reality is that sports betting is not legal in much of the US. DraftKings is only legal in about half of US states. Minnesota does not permit DraftKings to operate in their state. They don't permit any kind of online gambling…
I totally agree with your response to my first point. I have another comment in this thread that might be at the top right now, but I basically say that I think the fact that Minnesota, a state that has a complete ban on online sports betting, is bringing this case actually gives them an advantage over previous states who've brought cases because the entire argument can just be "if it walks like a duck and talks like…
I think the answer to that is also the same: if they're the same thing, and both are gambling, then Kalshi should have to be subject to gaming regulations and inspections the same as DraftKings is. Gaming is highly regulated even where it is legal.
Personally I don't have an issue with gambling, and I also don't have an issue with states that decide to ban it.
But I do have an issue with Polymarket, Kalshi, etc, using bullshit language to pretend they're not doing what they are obviously doing. They are obviously booking wagers. And as such, they are subject to the laws that states have outlined regarding those that take wagers.
It’s hard to pretend this isn’t at least gambling-adjacent when most people are simply betting on outcomes.
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I'm curious to see how this works out, because sports betting is _not_ in the CFTC's remit, and Kalshi etc's argument that states can't regulate them because they're not technically sports betting is contrary to the spirit of the law
> because sports betting is _not_ in the CFTC's remit Traditionally it has not been, but the current CFTC says that 'prediction bets on sports' ARE under their purview. This has not been fully challenged in court, though.
