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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

#191

Post by zaptheimpaler »

decimalenough wrote: post #4

Am I reading this right? The state of New York wants Kalshi to stop offering prediction gambling, excuse me, "event contracts" in New York, and the federal Commodity Futures Trading Commission just ordered Kalshi to keep operating in New York regardless?

They did the same thing in Minnesota too. The state voted AGAINST this crap and the CFTC basically says its their jurisdiction and “no you have to allow gambling even if you don’t want it!!!”. DJTs son is on the board of or an advisor to Kalshi and Polymarket, tons of money and influence are bought into this grift. Their right to pillage the public and create a new generation of addicts is more important than what people want or what’s good for them.

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

#192

Post by xp84 »

Terr_ wrote: post #74
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.

I don't think I can make a good ELI5 argument for (or against) that one as-written, because there are multiple differences going on at the same time. For example: 1. When you "lose" shorting a stock your potential loss is infinite, because you might be on the hook to buy (and then give away) GOOG at an arbitrarily high price. In contrast, the super-bowl bet is probably a fixed amount. 2. In the opposite direction, it…

I picked (for some reason) a random example of a made-up put option position, and most of the above response seems centered around the special qualities of short positions and put options. But there's just as much stock market gambling on the "bullish" direction, which doesn't have most of those same properties.

This part rings true partially though: "hedging to reduce how much you're relying on chance in your life" ... so you're saying that it's bad for society when people rely very much on chance in their life?

Is it the proper role of the government though, to put people in jail because they relied on chance too much in their life? Because that's what gambling bans amount to. And on top of everything, these exact same governments (including New York!) purport to "help" society by banning gambling, while still selling lottery tickets themselves.

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

#194

Post by FireBeyond »

amluto wrote: post #128
charcircuit wrote: post #43

Earlier quoted context omitted.

Do you think insurance markets create risk out of thin air too?

No. And, in fact, there is a concept called an “insurable interest” that is intended to prevent this kind of thing. If I buy an insurance contract that will pay me if your house burns down and then I burn down your house, then I’ve obviously committed arson, but I have also likely purchased that insurance contract illegally. And I don’t even need to burn down your house for that contract to be illegal. (IANAL)

There is a (possibly apocryphal) story of a man who bought an amazingly expensive Cuban cigar, insured it as it sat in his home, then smoked it... and filed an insurance claim for its loss. After back and forth with attorneys, the insurer paid the claim. And then sued him for their loss.

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

#195

Post by FireBeyond »

no-name-here wrote: post #104
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.

The difference seems to be that it’s insurance if you’re buying protection against your own home burning down. Versus when you’re financially wagering that your neighbor’s house burns down. (I.e whether you get paid back if the misfortune impacts you, vs you getting paid if misfortune visits someone else.)

How about Dead Peasant's Insurance, sorry, COLI (corporate-owned life insurance)? Policies that a company takes out on its employees with itself as a beneficiary, not the employee's family.

Employees were often unaware the policy exists, or only gave only vague consent buried in onboarding paperwork. Companies used it partly as a tax shelter, since the death benefits are generally received tax-free and cash value can grow tax-deferred.

It does still exist, though more tightly regulated, requiring explicit consent and only really able to be used on "extremely highly compensated employees" (executives).

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

#196

Post by no-name-here »

FireBeyond wrote: post #195
no-name-here wrote: post #104

Earlier quoted context omitted.

The difference seems to be that it’s insurance if you’re buying protection against your own home burning down. Versus when you’re financially wagering that your neighbor’s house burns down. (I.e whether you get paid back if the misfortune impacts you, vs you getting paid if misfortune visits someone else.)

How about Dead Peasant's Insurance, sorry, COLI (corporate-owned life insurance)? Policies that a company takes out on its employees with itself as a beneficiary, not the employee's family. Employees were often unaware the policy exists, or only gave only vague consent buried in onboarding paperwork. Companies used it partly as a tax shelter, since the death benefits are generally received tax-free and cash value can…

Even in that case it is designed to cover the company’s cost of losing the employee including the cost of recruiting and training replacements, etc.

The better analogy would be if it was insurance for someone completely unrelated dying - like saying we will pay you if x unrelated person dies.

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

#197

Post by DangitBobby »

gamblor956 wrote: post #137
dlcarrier wrote: post #123

Earlier quoted context omitted.

…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.

It was a creative ruling in multiple senses of the word. They invented the idea from whole cloth and it effectively created new laws from the bench.

> The Court decided that Filburn's wheat-growing activities reduced the amount of wheat he would buy for animal feed on the open market, which is traded nationally, is thus interstate, and is therefore within the scope of the Commerce Clause. Although Filburn's relatively small amount of production of more wheat than he was allotted would not affect interstate commerce itself, the cumulative actions of thousands of other farmers like Filburn would become substantial. Therefore, the Court decided that the federal government could regulate Filburn's production.

1. https://en.wikipedia.org/wiki/Wickard_v._Filburn

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

#198

Post by brainwad »

SpicyLemonZest wrote: post #52
aliasxneo wrote: post #30

Earlier quoted context omitted.

It seems that New York is asking the court for a temporary restraining order that would prohibit Kalshi from offering all event contracts nationwide. I also have zero love for Kalshi, but I can see why such a request would be concerning, regardless of whether I think Kalshi is a degenerate trash heap.

That's not true at all. New York is asking the court to stop the Kalshi executives, who are located in New York, from flagrantly violating the sports gambling laws of New York. Kalshi would be free to move to another state where sports gambling is legal if they wanted to keep the platform up.

But federal law preempts state law, and the federal regulator, the CFTC, has now decided that prediction market contracts are indeed swaps if you think about it, and thus under their regulation. If you believe the latter, then New York has no business trying to separately regulate Kalshi as a sports book.

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

#199

Post by brainwad »

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…

Everyone points to the gaming exemption, but is that not supposed to cover, well, games - the classic casino table games like blackjack, poker, craps, roulette, etc? I don't really see how horse or sports betting is gaming.

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

#200

Post by brainwad »

tadfisher wrote: post #103
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.

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.

It falls out of regulating OTC swaps as commodities derivatives, even when they are not actually derivative of a commodity (e.g. forex swaps or credit default swaps). If whether a set of bonds defaults by a certain date is a commodity, then any factual proposition is also a commodity if someone constructs a swap around it.
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