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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

#211

Post by amluto »

FireBeyond wrote: post #194
amluto wrote: post #128

Earlier quoted context omitted.

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.

But he surely had an insurable interest in that cigar!

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

#212

Post by SpicyLemonZest »

brainwad wrote: post #198
SpicyLemonZest wrote: post #52

Earlier quoted context omitted.

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.

I do not believe the latter. The attorneys general of nearly every state in the US have signed onto a letter explaining in detail (https://oag.maryland.gov/News/Documents/pdfs/2026-4-30%20CFT...) why the sports-related contracts sold on prediction markets are not swaps nor otherwise subject to CFTC regulation. This isn't a close or debatable question, it's not even a partisan one, and the only reason why a controversy exists is that Kalshi and Polymarket have gotten Americans hooked while bribing key government officials to clear the way.

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

#213

Post by brainwad »

SpicyLemonZest wrote: post #212
brainwad wrote: post #198

Earlier quoted context omitted.

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.

I do not believe the latter. The attorneys general of nearly every state in the US have signed onto a letter explaining in detail ( https://oag.maryland.gov/News/Documents/pdfs/2026-4-30%20CFT... ) why the sports-related contracts sold on prediction markets are not swaps nor otherwise subject to CFTC regulation. This isn't a close or debatable question, it's not even a partisan one, and the only reason why a controve…

I can't read your link (it 403s), but there's no fundamental line separating things that are clearly financial instruments but are nonetheless cash-settled derivatives on binary propositions (e.g. credit default swaps), ones that are clearly not financial but also not sports gambling (weather/political prediction markets) and things that are pretty obviously sports gambling (most of Kalshi). The form of these are all identical and so ought to be regulated identically.

I also don't see why _sports_ betting is so especially bad - even if New York were successful here, Kalshi would still be able to offer it's degenerate gamblers all sorts of stupid bets in culture, politics, weather, etc. When I grew up, the only thing you could bet on was horses and dogs... so the gamblers were really into form guides and horses. If the only thing they could gamble on was politics and news markets, they would just obsess over that instead.

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

#214

Post by SpicyLemonZest »

brainwad wrote: post #213
SpicyLemonZest wrote: post #212

Earlier quoted context omitted.

I do not believe the latter. The attorneys general of nearly every state in the US have signed onto a letter explaining in detail ( https://oag.maryland.gov/News/Documents/pdfs/2026-4-30%20CFT... ) why the sports-related contracts sold on prediction markets are not swaps nor otherwise subject to CFTC regulation. This isn't a close or debatable question, it's not even a partisan one, and the only reason why a controve…

I can't read your link (it 403s), but there's no fundamental line separating things that are clearly financial instruments but are nonetheless cash-settled derivatives on binary propositions (e.g. credit default swaps), ones that are clearly not financial but also not sports gambling (weather/political prediction markets) and things that are pretty obviously sports gambling (most of Kalshi). The form of these are all…

Link is working for me, at least. Perhaps Nevada's will work better? https://ag.nv.gov/uploadedFiles/agnvgov/Content/News/PR/PR_D...

What's bad about sports gambling is that it doesn't follow the model you're describing. The AGs point towards a study (https://perma.cc/4SF5-VGZH) which finds that legalizing sports betting does not just reallocate money that was going to go to gambling anyway. Instead it crowds out savings. There are people who will explicitly tell pollsters and journalists (see e.g. https://www.bloomberg.com/news/articles/2026-08-12/gen-z-inv... from yesterday) that they engage in sports betting because they see it as a fun alternative to traditional investments.

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

#215

Post by gamblor956 »

DangitBobby wrote: post #197
gamblor956 wrote: post #137

Earlier quoted context omitted.

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 relativel…

No, they didn't invent the idea wholesale.

There were similar issues dating back to the founding of the country. However nobody pays those any heed because it destroys the ideological claims they're trying to make.

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

#216

Post by brainwad »

SpicyLemonZest wrote: post #214
brainwad wrote: post #213

Earlier quoted context omitted.

I can't read your link (it 403s), but there's no fundamental line separating things that are clearly financial instruments but are nonetheless cash-settled derivatives on binary propositions (e.g. credit default swaps), ones that are clearly not financial but also not sports gambling (weather/political prediction markets) and things that are pretty obviously sports gambling (most of Kalshi). The form of these are all…

Link is working for me, at least. Perhaps Nevada's will work better? https://ag.nv.gov/uploadedFiles/agnvgov/Content/News/PR/PR_D... What's bad about sports gambling is that it doesn't follow the model you're describing. The AGs point towards a study ( https://perma.cc/4SF5-VGZH ) which finds that legalizing sports betting does not just reallocate money that was going to go to gambling anyway. Instead it crowds out s…

The NV link doesn't work either. I suspect geoblocking.

That study is measuring the effect of the introduction of _any_ modern online betting to these jurisdictions; before it was legalised there was no equivalent other than going to a casino or racetrack. But that genie can't be put back in the bottle just by restricting sports betting to sports books, as NY is asking for, now that all sorts of other prop bets are available as substitutes (and also sports betting on state-licensed sites). IMO regulators should focus on forcing the market makers to offer tighter spreads so prediction markets (and options etc.) are less negative-expectation for retail punters.

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

#217

Post by iAMkenough »

kevin_thibedeau wrote: post #164
anigbrowl wrote: post #65

Earlier quoted context omitted.

I think it's good to have the official context from the state of NY as well, which argues that Kalshi meets the state's standards for gambling; has serially refused to get the required licenses, and serves customers aged 18-20 in a market where gambling is restricted by law to people over 21. https://ag.ny.gov/press-release/2026/governor-hochul-and-att... My impression was that NY wanted a TRO to stop Kalshi operatin…

NY let DraftKings plaster Penn station and subway fare gates with ads before sports betting was legal there. They never sought an injunction to shut down those operations outside NY.

Something doesn’t have to be legal in one jurisdiction to advertise it another, thanks to the First Amendment.

There’s plenty of recreational marijuana billboards along interstate highways in states where it’s illegal.

DraftKings would have sued NY if they didn’t “let” them advertise.

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

#218

Post by yencabulator »

mminer237 wrote: post #157
bhouston wrote: post #93

Earlier quoted context omitted.

Your claim here is wrong: > 2. The State of NY files for a temporary restraining order requiring Kalshi to halt trading nationally, not just in NY. The State of New York did *NOT* file a temporary restraining order, neither in NY or nationally. Please find a citation of that if you want to claim it is true. Rather the State of New York filed suit here to stop operations in New York: https://ag.ny.gov/press-release/20…

New York did file for a TRO: https://storage.courtlistener.com/recap/gov.uscourts.nysd.66...

But that one seems be about halting trading in NY, not nationally:

> preliminarily and permanently enjoining Respondent and its principals, agents, and employees from:

> a. operating an unlawful gambling business, or otherwise advancing gambling activity or profiting from gambling activity, within or from New York or to persons in New York, [...]

So this claim from GP still looks incorrect:

> 2. The State of NY files for a temporary restraining order requiring Kalshi to halt trading nationally, not just in NY.

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

#219

Post by yencabulator »

rahimnathwani wrote: post #170
DannyBee wrote: post #53

Earlier quoted context omitted.

Lawyer here: https://ag.ny.gov/sites/default/files/court-filings/new-york... This is the complaint. If you go to page 29 you'll see what they requested. The claim they are trying to prevent them from offering all event contracts nationwide is simply false. The closest anywhere is a claim to enjoin them from violating some federal criminal statutes that they would not be violating if they were not operating in new yor…

The complaint says "within or from New York or to persons in New York". But Kalshi is headquartered in Manhattan, right? So how can they continue to offer all event contracts nationwide without operating 'within or from New York'? Would they have to immediately move their HQ and fire all New York based employees?

Can you provide abortion provider locating services from an office in Texas?

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

#220

Post by rahimnathwani »

yencabulator wrote: post #219
rahimnathwani wrote: post #170

Earlier quoted context omitted.

The complaint says "within or from New York or to persons in New York". But Kalshi is headquartered in Manhattan, right? So how can they continue to offer all event contracts nationwide without operating 'within or from New York'? Would they have to immediately move their HQ and fire all New York based employees?

Can you provide abortion provider locating services from an office in Texas?

I was specifically responding to this part of what DannyBee wrote:

"The claim they are trying to prevent them from offering all event contracts nationwide is simply false."

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