9th Circuit sides with states in Kalshi gambling fight • Hacker News Board

Re: 9th Circuit sides with states in Kalshi gambling fight

#11

Post by jareklupinski » Sat, Aug 29, 2026, 1:33 AM UTC

echelon wrote: post #10

mullingitover wrote: post #5

> “Congress did not take a wrecking ball to all sports gambling regulations built up over decades by federal, state, and tribal governments when it amended the (Commodity Exchange Act),” Judge Ryan Nelson wrote in the unanimous decision. Incredible that it's taken this long to arrive at the obvious.

Gambling is a negative externality that needs to be taxed. Gambling takes advantage of the poor, under-educated, and addictive personalities and puts them into financial distress. This places burden on families, the state, and local municipalities. It creates strain on the workforce and deflects legitimate economic activity that would otherwise strengthen the economy. We're a free society. I'm fine with gambling from…

> companies need to pay 40-50% of their gross revenue to the government. That's comparable to tobacco.

taxing a vice is worth it on paper, but the second-order effects (nonstop alcohol ads, pervasive gambling app dark patterns) aren't worth it imo

Re: 9th Circuit sides with states in Kalshi gambling fight

#12

Post by karlgkk » Sat, Aug 29, 2026, 1:33 AM UTC

echelon wrote: post #10

mullingitover wrote: post #5

> “Congress did not take a wrecking ball to all sports gambling regulations built up over decades by federal, state, and tribal governments when it amended the (Commodity Exchange Act),” Judge Ryan Nelson wrote in the unanimous decision. Incredible that it's taken this long to arrive at the obvious.

Gambling is a negative externality that needs to be taxed. Gambling takes advantage of the poor, under-educated, and addictive personalities and puts them into financial distress. This places burden on families, the state, and local municipalities. It creates strain on the workforce and deflects legitimate economic activity that would otherwise strengthen the economy. We're a free society. I'm fine with gambling from…

Or, at least treat it like a public health issue. Used to be that if you wanted to gamble, you had to physically to a dedicated gambling zone.

Re: 9th Circuit sides with states in Kalshi gambling fight

#13

Post by mandevil » Sat, Aug 29, 2026, 1:35 AM UTC

delichon wrote: post #8

> As an example, the court explained that whether the Super Bowl happens is an “occurrence,” but who wins it is not. This level of parsing looks like judicial legislation to me. Isn't it one occurrence if the Rams win and another if the Packers win? Better that they declare the law void for vagueness and give the legislature another shot at it. Guessing what the words mean, when it is not at all clear to professional…

Everyone agreed that this (what the court ruled) was the plain meaning of the law up until Kalshi just decided to go for it. They basically did an Uber on the law, completely ignoring how it had long been interpreted and demanding someone stop them. And only once Kalshi wanted to make money on sports gambling did there start to be parsing like this, to try to argue that sports gambling was legal on a CFTC-regulated exchange. If Kalshi had gotten the law thrown out for vagueness then basically there was a road map for making any law that got in the way of a company making money thrown out for vagueness.

The key is that up until a few years ago basically the universal consensus was that sports gambling was not possible on a CFTC regulated exchange, then all of a sudden Kalshi did it and now they are trying to pay enough lawyers to get them to justify it. This ruling is not judicial legislation, this is demanding that companies actually follow the law.

Re: 9th Circuit sides with states in Kalshi gambling fight

#14

Post by aabdi » Sat, Aug 29, 2026, 1:35 AM UTC

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Re: 9th Circuit sides with states in Kalshi gambling fight

#15

Post by consensus1 » Sat, Aug 29, 2026, 1:36 AM UTC

karlgkk wrote: post #12

echelon wrote: post #10

Earlier quoted context omitted.

Gambling is a negative externality that needs to be taxed. Gambling takes advantage of the poor, under-educated, and addictive personalities and puts them into financial distress. This places burden on families, the state, and local municipalities. It creates strain on the workforce and deflects legitimate economic activity that would otherwise strengthen the economy. We're a free society. I'm fine with gambling from…

Or, at least treat it like a public health issue. Used to be that if you wanted to gamble, you had to physically to a dedicated gambling zone.

Which we called the "stock market"

Re: 9th Circuit sides with states in Kalshi gambling fight

#16

Post by delichon » Sat, Aug 29, 2026, 1:40 AM UTC

mandevil wrote: post #13

delichon wrote: post #8

> As an example, the court explained that whether the Super Bowl happens is an “occurrence,” but who wins it is not. This level of parsing looks like judicial legislation to me. Isn't it one occurrence if the Rams win and another if the Packers win? Better that they declare the law void for vagueness and give the legislature another shot at it. Guessing what the words mean, when it is not at all clear to professional…

Everyone agreed that this (what the court ruled) was the plain meaning of the law up until Kalshi just decided to go for it. They basically did an Uber on the law, completely ignoring how it had long been interpreted and demanding someone stop them. And only once Kalshi wanted to make money on sports gambling did there start to be parsing like this, to try to argue that sports gambling was legal on a CFTC-regulated e…

Declaring the law void for vagueness would not favor Kalshi. It would undercut the federal preemption that Kalshi is advocating for.

Re: 9th Circuit sides with states in Kalshi gambling fight

#17

Post by combobyte » Sat, Aug 29, 2026, 1:40 AM UTC

jareklupinski wrote: post #11

echelon wrote: post #10

Earlier quoted context omitted.

Gambling is a negative externality that needs to be taxed. Gambling takes advantage of the poor, under-educated, and addictive personalities and puts them into financial distress. This places burden on families, the state, and local municipalities. It creates strain on the workforce and deflects legitimate economic activity that would otherwise strengthen the economy. We're a free society. I'm fine with gambling from…

> companies need to pay 40-50% of their gross revenue to the government. That's comparable to tobacco. taxing a vice is worth it on paper, but the second-order effects (nonstop alcohol ads, pervasive gambling app dark patterns) aren't worth it imo

When was the last time you saw an ad for cigarettes?

Those second-order effects are easy to mitigate with sensible public policy. And it's not like we have to invent the solution from scratch — we've done it before, very effectively.

Re: 9th Circuit sides with states in Kalshi gambling fight

#18

Post by [deleted] » Sat, Aug 29, 2026, 1:41 AM UTC

mullingitover wrote: post #5

> “Congress did not take a wrecking ball to all sports gambling regulations built up over decades by federal, state, and tribal governments when it amended the (Commodity Exchange Act),” Judge Ryan Nelson wrote in the unanimous decision. Incredible that it's taken this long to arrive at the obvious.

[deleted]

Re: 9th Circuit sides with states in Kalshi gambling fight

#19

Post by DannyBee » Sat, Aug 29, 2026, 1:42 AM UTC

Lawyer here - As i explained last time we had a variant of this thread (see comment history if you are interested), this is a very complicated area that people try to make very simple.

It doesn't have to be complicated, mind you, but right now the way the law is written is basically:

1. Transmitting sports betting info between states is a federal crime unless it's legal in both states (18 U.S.C. § 1084(a))

2. The CEA regulations ban contracts that are illegal under state law (17 CFR 40.11)

3. Other forms of gambling/betting/contracts that are not sports are generally a-ok.

4. This is not a case of first impression, it's just getting relitigated because Kalshi doesn't want to follow the actual law. This has actually been pretty settled law for a long time, with new flareups maybe once a decade. Kalshi is just hoping to be treated like Uber was.

The third circuit's decision is pretty clearly "out there" in terms of existing caselaw.

However, this will end up at SCOTUS, and everything until then just doesn't matter. That will be a coin flip even though it shouldn't be

Re: 9th Circuit sides with states in Kalshi gambling fight

#20

Post by jmalicki » Sat, Aug 29, 2026, 1:45 AM UTC

delichon wrote: post #8

> As an example, the court explained that whether the Super Bowl happens is an “occurrence,” but who wins it is not. This level of parsing looks like judicial legislation to me. Isn't it one occurrence if the Rams win and another if the Packers win? Better that they declare the law void for vagueness and give the legislature another shot at it. Guessing what the words mean, when it is not at all clear to professional…

From the opinion:

"Because the definitions of event and occurrence do not resolve the issue before us, we must also consider the statutory context"

They talk about this and the exact definitions for basically the entire opinion. It's not just "meh, I felt like it". They are dealing with how these words have been defined in prior statutes.