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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

#141

Post by SpicyLemonZest »

rgmerk wrote: post #139
SpicyLemonZest wrote: post #118

Earlier quoted context omitted.

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.

Which I think is obviously where the US is going to settle in the long term. Just a question of how many people lose their shirts before we get there.

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

#142

Post by charcircuit »

tsimionescu wrote: post #136
charcircuit wrote: post #87

Earlier quoted context omitted.

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 ele…

>many others are simply taking a bet

Which can provide much needed liquidity to the market.

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

#143

Post by amazingman »

dcrazy wrote: post #132
usehackernews wrote: post #130

Earlier quoted context omitted.

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.

These dishonest word games are silly. Insuring against what?

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

#144

Post by rgmerk »

SpicyLemonZest wrote: post #141
rgmerk wrote: post #139

Earlier quoted context omitted.

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.

Which I think is obviously where the US is going to settle in the long term. Just a question of how many people lose their shirts before we get there.

In Australia, where legal online sports betting is everywhere, it's hugely unpopular with everyone except the bookmakers, TV networks (for whom betting ads during sports broadcasts are the one remaining decent revenue stream), a relatively small group of gamblers (many of whom gamble enough for it to pose serious problems for them and their families), and the nominally socially-democratic politicians running the federal government (who were more than happy to ban social media for teens despite the evidence being ambiguous at best, but are amazingly reluctant to tackle this, despite the demonstrated harm).

Put the genie back in the bottle and ban online sports betting. If somebody wants to place a bet on sport, make them physically go to a betting shop or the racetrack.

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

#145

Post by nickff »

tyre wrote: post #99
decimalenough wrote: post #78

Earlier quoted context omitted.

It's kind of hard to take Kalshi out of this, since the whole premise for the Commodity Futures Trading Commission's authority here is that Kalshi is a commodity futures trading exchange, not a gambling site.

I think the gp just means, “if we put aside that this is a contentious company.” I’m not sure that interstate commerce should apply here—it seems correct that a state can ban gambling, even if it is on the Internet against out-of-state US nationals—but if the CFTC is asserting its pre-emption under existing law, it needs to assert it (as it is doing so here.) It’s pretty clear that this is (a) gambling and (b) explic…

If Wickard v Filburn is still good law, I don’t understand how the betting market is anything but interstate commerce. Futures trading is betting, especially where they’re settled in cash.

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

#146

Post by dcrazy »

amazingman wrote: post #143
dcrazy wrote: post #132

Earlier quoted context omitted.

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.

These dishonest word games are silly. Insuring against what?

Insuring against loss. I just looked up the official name; it’s called prize indemnity insurance.

In the case of those “make a free throw from half court and win a car” competitions, the risk is a known value: the prize sponsor’s wholesale vehicle cost. The sponsor pays a premium for each contest, which is calculated based on the likelihood of someone winning.

This is a very well established insurance market. You as an individual can go out and buy hole-in-one insurance. It’s more popular in Korea and Japan where there is a strong societal expectation of throwing a lavish party if one hits a hole in one. Here in the States, it’ll cover a round of drinks for the clubhouse.

In the case of the bar, the Kalshi bet is functioning as an insurance policy against a potentially open-ended loss. The bar could be packed, the U.S. wins and everyone drinks the bar dry. So Kalshi is fulfilling a legitimate business role here.

But insurance is boring and highly regulated. The bar could likely have bought an equivalent policy from an underwriter in the Financial District. Or frankly from a rich regular. Kalshi wants to make insane amounts of money from degenerate gamblers, and to be immune from state regulators who are more answerable to citizens than the CFTC commissioners. Hence adopting the fig leaf of “futures contracts.”

If you thought I’m on Kalshi’s side here, I’m definitely not.

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

#147

Post by horacemorace »

SpicyLemonZest wrote: post #58
akerl_ wrote: post #46

Earlier quoted context omitted.

Do you have a source for that? From the release: > 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.

A sibling comment has provided the source, but I want to separately emphasize that you must unlearn your instincts that the federal government wouldn't lie to you. Most government agencies are under a top-down mandate to tell lies whenever Donald Trump or someone who's bribed him would benefit.

“Assumption of regularity” isn’t. Under this plutocratic corrupt regime

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

#149

Post by amazingman »

dcrazy wrote: post #146
amazingman wrote: post #143

Earlier quoted context omitted.

These dishonest word games are silly. Insuring against what?

Insuring against loss. I just looked up the official name; it’s called prize indemnity insurance. In the case of those “make a free throw from half court and win a car” competitions, the risk is a known value: the prize sponsor’s wholesale vehicle cost. The sponsor pays a premium for each contest, which is calculated based on the likelihood of someone winning. This is a very well established insurance market. You as…

Insurance against loss due to ... paying for insurance? The language of the thing is compelling at first glance, but it doesn't actually parse. Sharing your gambling wins with patrons to attract more patrons is not insurance.

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

#150

Post by none_to_remain »

pdonis wrote: post #10
pamcake wrote: post #2

So the CFTC frames Kalshi as a financial derivatives exchange for the financial instrument category of event contracts, dismissing NYs characterization of it as a gambling/betting platform. Interesting.

What exactly is the difference between a financial derivatives exchange and a gambling platform? Both involve placing bets on uncertain future outcomes.

The gambling platforms are buddies with Tish James and the state, while the prediction markets are buddies with the CFTC and the feds. That's the important difference in this case
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