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Minnesota becomes first state to ban prediction markets

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Re: Minnesota becomes first state to ban prediction markets

#121

Post by superfrank »

mayneack wrote: post #94
superfrank wrote: post #34

For the record, Minnesota currently has a complete ban on sports betting. We've seen a couple other states that allow sports betting go after prediction markets. Personally, I feel that any state that allows sports betting is going to struggle to argue a case to ban prediction markets because you're essentially arguing over implementation details. Even arguments that certain prediction markets are ripe for insider tr…

Arguing over implementation details is a pretty common thing for laws to do. Maybe it would weaken the logical consistency of their laws, but that's not really a thing that matters. Why do states allow hunting some animals and not others? Why do states distinguish between different forms of income to tax? It's all implementation details.

I wasn't saying we shouldn't debate the implementation details. I just think they should be separate arguments.

It's like if someone killed my dog with 3d printed gun and so everyone started talking about banning or regulating 3d printers. It's like, yes, debating 3d printer regulation is probably a worthwhile debate to have, but regardless of where we end up on that it doesn't change the fact that that person killed my dog.

We should be having a debate as to whether there are certain things that are off limits to bet on, but regardless of where that debate goes, if a state has banned sports betting, it should be banned regardless of the platform.

Re: Minnesota becomes first state to ban prediction markets

#122

Post by _--__--__ »

cyberax wrote: post #105
_--__--__ wrote: post #76

Earlier quoted context omitted.

Most available data suggests that sports betting is much worse for the people making the bets, as it better targets people with poor impulse control. Bad bets in political markets aren't causing measurable increases in bankruptcy and domestic violence rates ( https://thezvi.substack.com/p/the-online-sports-gambling-exp... ).

Likely because this type of betting is still niche. Give it some time.

Sports gambling a few advantages over any other subject that seem near insurmountable to me:

- it has the semi-respectable veneer of something that normal people have done throughout human history

- it has completely parasitized existing sports media to target new users in ways that aren't available for other topics

- some variant of 'sports' is happening 24/7/365 with enough prop bet granularity to capture the full attention and disposable income of addicts. There's an ongoing controversy with a star college football quarterback who was going to MLB games to place bets on every single individual pitch.

You can basically think of gambling addicts as a finite resource that these different companies are competing for. Many people get addicted to lootbox/gacha games at an early age, and even larger portion are already deep in sports gambling. The target demo for non-sports prediction markets roughly matches to people in earlier times who got into commodities futures or optimal strategies for casino games (which clearly existed but never at a scale to rival what we see with sports betting right now).

Re: Minnesota becomes first state to ban prediction markets

#123

Post by superfrank »

kube-system wrote: post #118
superfrank wrote: post #109

Earlier quoted context omitted.

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…

> as opposed to trying to explain why betting on the Super Bowl on Kalshi is somehow different than making the same bet on DraftKings. 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 wit…

Yep. I totally agree.

For the record, I'm actually a very active Kalshi user, but I cannot see how anyone can seriously argue that it's not sports betting.

Re: Minnesota becomes first state to ban prediction markets

#124

Post by jcranmer »

rdataguy wrote: post #63
superfrank wrote: post #34

For the record, Minnesota currently has a complete ban on sports betting. We've seen a couple other states that allow sports betting go after prediction markets. Personally, I feel that any state that allows sports betting is going to struggle to argue a case to ban prediction markets because you're essentially arguing over implementation details. Even arguments that certain prediction markets are ripe for insider tr…

But I thought the Supreme Court said online sports betting was interstate commerce and out of the domain of state legislation. Or did I get that completely wrong?

You have it backwards. Murphy v NCAA ruled that the federal legislation banning sports betting was unconstitutional, and that it was up to the states to regulate gambling.

Re: Minnesota becomes first state to ban prediction markets

#127

Post by michaefe »

While it's obviously sports betting, the fact is that federal law gives the CFTC the power to determine what is and isn't a future and expressly preempts state intervention in futures markets. And, the case as to why futures markets generally should be subject only to federal oversight is quite strong IMO. So, the case can quickly become whether or not the CFTC should consider sports betting to be a future, and judges typically defer to the executive branch when it's not obvious (and in this case I don't think it is, the bar owner in Philly hedging an Eagles loss is an entirely plausible, albeit unlikely and uncommon, situation).

While I am partial to the argument that the CFTC is actually taking away the states' 10th Amendment police power right, that is a somewhat tenuous case in comparison to the enumerated right of the federal government to provide sole jurisdiction to the executive branch to enforce a law (and not to mention a law that impacts interstate commerce).

I imagine Minnesota loses this case and what's far more likely is either a more liberal congress changes what is a future by law or a more liberal executive branch reduces the protections for Kalshi et al.

Re: Minnesota becomes first state to ban prediction markets

#128

Post by jmyeet »

Remember in the late 2010s when the hack Ajit Pai, then fCC Chair, said that the FCC couldn't or shouldn't enforce Obama-era Title 8 net neutrality? Remember how states like California then said "OK, it's not a federal issue so we'll do it at the state level"? Then remember how the DoJ, at the FCC's direction, sued California [1]?

Well, which is it? Was net neutrality a state or federal issue? The answer is it's, as always, a Schrodinger's STate's rights issue. That is, it's a "state's rights" issue when it suits them, a federal issue when it suits them and it's neither when it suits them. Lack of any kind of regulation is the goal. This isn't some libertarian pipe dream. It's just naked pro-company and pro-billionaire gutting of government to boost profits.

Fast forward to prediction markets. The CFTC regulates this (arguably). Another deregulation hack is in charge. And again, states like Minnesota who already ban sports betting are being sued. "State's rights" btw. We're seeing the exact same pattern.

This on the same day that the president who sued the IRS, which was defended by the president's DoJ and the recess appointee Attorney-General settled a $10 billion lawsuit right as a federal judge tosses it because the case lacked adversity [2].

Besides the J6 slush fund, part of this settlement is that the IRS is barred from ever investigating Trump, his family or the Trump Organization for tax fraud.

The level of corruption and kleptocracy here is beyond belief and what's really frightening is that a good 35-40% of the population not only don't care but actively support something they will never benefit from and there hasn't been (and won't be) any political price paid for any of it. The president's endorsement still carries weight and just today, we've had the most expensive Congressional primary in history (~$35 million) where Trump unseated a sitting Congressmen for daring to push for releasing the Epstein files.

[1]: https://www.justice.gov/archives/opa/pr/justice-department-f...

[2]: https://www.msn.com/en-us/news/insight/trump-eyes-1-776b-irs...

[3]: https://www.washingtonpost.com/national-security/2026/05/19/...

Re: Minnesota becomes first state to ban prediction markets

#129

Post by yieldcrv »

michaefe wrote: post #127

While it's obviously sports betting, the fact is that federal law gives the CFTC the power to determine what is and isn't a future and expressly preempts state intervention in futures markets. And, the case as to why futures markets generally should be subject only to federal oversight is quite strong IMO. So, the case can quickly become whether or not the CFTC should consider sports betting to be a future, and judge…

90% agree, the CFTC doesn't consider these futures contracts, it regulates them under its "contract market" authority, that Congress designated and updated periodically over time

This is the authority on the CFTC's own website on prediction markets "For more information" section

https://www.cftc.gov/LearnandProtect/PredictionMarkets

https://uscode.house.gov/view.xhtml?hl=false&edition=prelim&...

And yes, both the Supremacy clause and the Interstate commerce clause neutralize any 10th amendment claim, unless the Federal government or any of its agencies was completely mum on the activity. But since the Federal government has exerted authority over that industry, via the interstate commerce clause, states can pound sand.

Re: Minnesota becomes first state to ban prediction markets

#130

Post by usefulcat »

dymk wrote: post #50
nojito wrote: post #29

Earlier quoted context omitted.

Just like other exchanges. They charge trading fees.

They also place their own bets within their own market. They don't just make money on trading fees.

Sounds like a glaringly obvious conflict of interest?
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