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CFTC declares market emergency, orders Kalshi to continue to operate in New York

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Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York

#131

Post by antasvara »

dannyw wrote: post #113
tadfisher wrote: post #103

Earlier quoted context omitted.

Maybe an "event outcome prediction contract" simply ought not to be considered a "commodity" under any consistent interpretation of the law and the English fucking language.

I think it should be well defined. I personally think prediction markets for say, federal and state elections, are a net benefit. It provides another source off information, and there’s much less insider trading risk. “”Event outcome prediction contracts”” on sports, clinical trials, is late stage capitalism, and yes, bullshit.

I think the point is more "why is the outcome of an event like an election considered a commodity" and not a question of the value of event contracts?

Like, why would the same agency regulating wheat futures also be responsible for regulating event contracts? I know the simple answer is that Congress said they should be, but conceptually it's a bit odd.

Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York

#132

Post by dcrazy »

usehackernews wrote: post #130
wredcoll wrote: post #97

Earlier quoted context omitted.

There is no risk to me if the rockets lose their next game. Unless I bet $100 on them winning, then a risk appears.

If you’re a Houston bar owner dependent on post game traffic, there would be risk of them losing. There are a thousand of exchanges that have no risk on my life, but that doesn’t mean they don’t impact others.

A bar here in SF made local news for using Kalshi for just this purpose: https://sfstandard.com/2026/07/06/san-francisco-world-cup-ka...

In a similar vein, companies that run skill competitions (hole-in-one prizes, half-court shots, etc.) can and regularly do buy insurance on those events.

Under this theory, Kalshi is arguably not trading in commodities, but insurance, which is state-regulated.

Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York

#133

Post by triceratops »

subtlejellyfish wrote: post #71
xp84 wrote: post #49

Earlier quoted context omitted.

ELI5 why it's better for you to place a $10,000 bet that, say, GOOG falls below $300 by February 2028, than to bet the same that the Pats win the Super Bowl? They're both gambling.

There's a legitimate, non-gambling use case: hedging against your existing position in GOOG. There's no equivalent instrument for sports.

> There's no equivalent instrument for sports.

Options on the sports team's parent company. I mean you want to hedge against financial losses due to on-field performance but also commercial performance, right? What is the utility of hedging purely against on-field performance?

Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York

#134

Post by antasvara »

arjie wrote: post #50

This seems correct, even though I think it's unfortunate that these prediction markets are ruining so many people's lives. > In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages. This seems naturally the territory of the CFTC. They have exclusive right to regulate futures and derivativ…

[dead]

Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York

#135

Post by tripletao »

DannyBee wrote: post #89
aliasxneo wrote: post #80

Earlier quoted context omitted.

Not literally. I think the text in question is: "within or from New York or to persons in New York." Where CFTC is arguing that "from" would have interstate consequences. I'm not a legal expert, though, so I have no idea if something similar has been fought in court before. edit Interesting, I found KalshiEX LLC v. Flaherty [1] which seems strikingly similar to this case and was ruled in favor of Kalshi. "The Third C…

These are the CFTC licensed contract markets, which are not the same exact thing. I'm not sure how to explain all this without writing a 70 page dissertation on HN, and it's probably not worth it :) Overall - this is a wildly complicated area. To give you an idea how complicated: Ignoring state law, transmitting gambling information for sports events over the wire is a federal crime. See 18 U.S.C. § 1084(a), which ma…

I don't think you're disputing that the requested order would halt Kalshi's operations nationwide for as long as Kalshi remained headquartered in NYC though? The CFTC's framing is disingenuous, presumably because they wanted to create a false impression that NY was attempting to regulate activity without any nexus in that state, but that's still the practical effect given Kalshi's current location.

Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York

#136

Post by tsimionescu »

charcircuit wrote: post #87
skillina wrote: post #70

Earlier quoted context omitted.

Of course not. If a building exists, there is a risk it burns down. Insurance just moves that risk around. The only way to eliminate the risk is to not build anything anywhere.

So what would be the difference between buying insurance against downtime of a service you depend on (eg. Cloudflare) vs making a bet on the prediction market that there will be downtime? Even without these markets there is risk that the service goes down. The existence of the prediction market doesn't cause it to be possible.

This is a framing that obscures rather than illuminating. Perhaps in this specific case, the prediction market bet acts as insurance (and even then, only for those market participants who are actual Cloudflare customers; many others are simply taking a bet). But the prediction market allows bets of many other kinds, many of which do not act as insurance against anything. Sports bets are the most obvious, but also election bets, bets on wars, bets on celebrities' lives, bets on show durations, bets on Jesus returning, bets on aliens existing - none of these can be construed as insurance. When the vast majority of actual bets traded on this betting market can not be construed as insurance, you can't defend the market as offering insurance.

Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York

#137

Post by gamblor956 »

dlcarrier wrote: post #123
akerl_ wrote: post #32

Earlier quoted context omitted.

Yea; interstate commerce being the domain of the federal government is one of the more tested legal concepts we have here.

…And growing wheat on your own land to feed your own cattle somehow counts as interstate commerce, despite no commerce taking place and the wheat never leaving your property, let alone the state. (Wickard v. Filburn)

Wickard was growing wheat for interstate commerce. The case was about whether the additional wheat he grew for "personal" use was also part of interstate commerce.

Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York

#138

Post by rgmerk »

tyre wrote: post #102
rgmerk wrote: post #83

I'm with the state of NY on the merits here. They're basically BetFair, and they should be subject to regulation like it.

Sadly for you, this SCOTUS is not a meritocracy.

The US SCOTUS is the single best argument against putting too much into a written constitution.

Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York

#139

Post by rgmerk »

SpicyLemonZest wrote: post #118
galleywest200 wrote: post #94

Earlier quoted context omitted.

Isn't this how gambling works though? You and I place a similar value of chips on a table, then the winner walks it over to a third party (the counter at the casino) to exchange the chips for currency?

It's a relatively uncommon structure for gambling, and things that do work that way (like casual sports bets between friends) are often exempt from local gambling laws. Traditional sports betting was done directly between a gambler and their sportsbook of choice at whatever profit-maximizing odds the bookie chose.

In other parts of the world, betting exchanges like BetFair operate this way, but unlike Kalshi, there's no pretence that what's occurring is anything other than gambling, and they are heavily regulated like other sports betting operators.

Re: CFTC declares market emergency, orders Kalshi to continue to operate in New York

#140

Post by tsimionescu »

dmix wrote: post #114
georgemcbay wrote: post #17

Wait, so all that Republican talk of support for state's rights was really just all about the racism this whole time? Shocker.

It's disingenuous to pretend the current US admin prioritizes state rights or separation of powers. They have very explicitly pushed an ideology of unitary power and maximizing their control of federal agencies over congress and state powers.

That's exactly the point, yes - the Republicans have always claimed to be the party of Small Government and of States Rights while in the opposition, but in reality when they are in power they immediately act to expand federal powers, both over the states that they don't like and overall in the economy and day to day life.
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