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Launch HN: Kalshi (YC W19) – A regulated exchange for trading on events

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Re: Launch HN: Kalshi (YC W19) – A regulated exchange for trading on events

#101

Post by ghufran_syed »

thecoppinger wrote: post #62
lacker wrote: post #40

Earlier quoted context omitted.

I think it's unfair to jump to the conclusion that Kalshi is to blame for regulators banning PredictIt. From the link you posted, PredictIt promised the regulators they would: * be small-scale and not-for-profit * be operated for academic and research purposes only It doesn't really say what "small-scale" means, but obviously, if PredictIt keeps being successful and growing, eventually they will no longer be small sc…

I went deep doing research on prediction markets a few months ago, and no, it's not an unfair conclusion. Brian Quintenz is a Republican financial manager who was nominated to be a commissioner of the CFTC by Trump in 2017.[1] During his time at the CFTC, as I recall, there was heavy bipartisan action, which he was praised for. Well, there's a slightly more cynical take that he was indeed completely crooked. My memor…

So the guy the administration fired is somehow also the guy to make the current CFTC do what he wants? I’m sure he knows the rules and institutional concerns of the CFTC, but why would he have undue influence over the person who replaced him?

Re: Launch HN: Kalshi (YC W19) – A regulated exchange for trading on events

#102

Post by ghufran_syed »

species9606 wrote: post #97
dang wrote: post #42

Earlier quoted context omitted.

I have no knowledge about this particular case but that is absolutely not how YC operates or thinks about its business. I've never heard a single comment from anyone at YC along such lines. I'm not moderating this subthread the way we normally would*, but IMO you guys should be more scrupulous about posting snarky smears. * because https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... (edit: for anyone wond…

“I have no knowledge about this particular case” Respectfully, I think you should have stopped there, or perhaps earlier. There is quite a body of evidence already provided in this thread suggesting that Kalshi is an anticompetitive regulatory-capture play.

perhaps you could post said evidence?

Re: Launch HN: Kalshi (YC W19) – A regulated exchange for trading on events

#103

Post by ghufran_syed »

barnbuilder wrote: post #31

> Before Kalshi, markets that allowed you to trade on economically relevant events were illegal or unregulated. Totally untrue. PredictIt was legal and regulated and well-loved for many years, operating with the permission of the CFTC under a no-action letter. Then Kalshi hired former CFTC commissioner Brian Quintenz and soon, PredictIt was suddenly deemed by the CFTC to have committed still-unenumerated violations o…

How is a non-profit trade-size limited prediction market in any way a competitor for Kalshi?

And predictit will have its day in court [1] where both sides will actually need to present evidence, unlike on an internet forum

[1] https://www.globenewswire.com/en/news-release/2022/10/06/253...

Re: Launch HN: Kalshi (YC W19) – A regulated exchange for trading on events

#105

Post by bsid »

initplus wrote: post #67
nradov wrote: post #59

Earlier quoted context omitted.

What about sports betting? People would still play those games so the "risk" isn't artificial.

There is no real market participant who could benefit from hedging in sports betting. Only sports betting operators themselves, and the teams (who are legally forbidden from participating in betting). But in a commodity market there are real participants whose primary business model is production, being able to hedge against future price swings provides real value to these businesses.

Why is this different than the massive sports-merchandising part of a teams business, where they sell more stuff depending on whether they win or lose? I imagine they'd want to bet.. err i mean hedge to provide real value to their business.

(despite the snark, I'm also curious how the situation is different)

Re: Launch HN: Kalshi (YC W19) – A regulated exchange for trading on events

#106

Post by species9606 »

ghufran_syed wrote: post #102
species9606 wrote: post #97

Earlier quoted context omitted.

“I have no knowledge about this particular case” Respectfully, I think you should have stopped there, or perhaps earlier. There is quite a body of evidence already provided in this thread suggesting that Kalshi is an anticompetitive regulatory-capture play.

perhaps you could post said evidence?

I added an edit, indicating that this thread already has quite a bit of it.

Re: Launch HN: Kalshi (YC W19) – A regulated exchange for trading on events

#107

Post by nl »

pizzalife wrote: post #99
tmansour wrote: post #85

Earlier quoted context omitted.

YC has funded a ton of great financial companies eg. Coinbase, One Chronos, etc. We're a derivative exchange regulated by the CFTC. We're no more gambling than grain futures are!

You're not a financial company. Grain futures have an actual use. Come on now. You're insulting the reader base here.

There are a vast number of use cases here. A simple one is the peak mortgage rate market[1]. That allows you to create hedges against movement on variable rate homeloans directly.

There's a number of unemployment-related markets that allow you to create insurance for yourself against unemployment.

And these are just things I've thought up of in a couple of minutes, not even considering what actual financial markets might want to use them for.

[1] https://kalshi.com/events/FRMMAX-22DEC29/markets/FRMMAX-22DE...

Re: Launch HN: Kalshi (YC W19) – A regulated exchange for trading on events

#108

Post by thecoppinger »

ghufran_syed wrote: post #101
thecoppinger wrote: post #62

Earlier quoted context omitted.

I went deep doing research on prediction markets a few months ago, and no, it's not an unfair conclusion. Brian Quintenz is a Republican financial manager who was nominated to be a commissioner of the CFTC by Trump in 2017.[1] During his time at the CFTC, as I recall, there was heavy bipartisan action, which he was praised for. Well, there's a slightly more cynical take that he was indeed completely crooked. My memor…

So the guy the administration fired is somehow also the guy to make the current CFTC do what he wants? I’m sure he knows the rules and institutional concerns of the CFTC, but why would he have undue influence over the person who replaced him?

I hear what you're saying, but I feel there is an assumption made by your counter-argument which insinuates that the CFTC is a functional and non-corrupt organization. My perspective, based on my research, seems to suggest otherwise.

Unfortunately, this seems to be endemic of American politics and government organizations.

In Kalshi's case, Brian Quintenz aside, let's talk about Jeff Bandman, who spent close to 3 years at the CFTC.[1] Well, after doing so, he became a regulatory strategy advisor for Kalshi.

Here I quote a Bloomberg article[2] on Kalshi from earlier this year:

"Eventually they tracked down a former CFTC official, Jeff Bandman, who assured them the landscape was changing; he agreed to help them navigate the agency and its characters."

So yeah, I'll concede that there are a few un-generous assumptions that need to be made to fully paint Kalshi as a bad actor in this situation, but given the various pieces of context available, I don't feel it's an overstep to call behavior like this out.

Ultimately Kalshi is set to be a unicorn startup, and I wish the founders success in their endeavors—they appear to be exceptionally bright and hard working individuals—but what appears to have transpired for them to have their shot doesn't sit right with me.

[1] https://www.linkedin.com/in/jeffbandman/

[2] https://www.bloomberg.com/news/features/2022-05-26/kalshi-s-...

Archive link as the original has a paywall:

https://archive.ph/20220527010753/https://www.bloomberg.com/...

Re: Launch HN: Kalshi (YC W19) – A regulated exchange for trading on events

#110

Post by dang »

species9606 wrote: post #97
dang wrote: post #42

Earlier quoted context omitted.

I have no knowledge about this particular case but that is absolutely not how YC operates or thinks about its business. I've never heard a single comment from anyone at YC along such lines. I'm not moderating this subthread the way we normally would*, but IMO you guys should be more scrupulous about posting snarky smears. * because https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... (edit: for anyone wond…

“I have no knowledge about this particular case” Respectfully, I think you should have stopped there, or perhaps earlier. There is quite a body of evidence already provided in this thread suggesting that Kalshi is an anticompetitive regulatory-capture play.

The GP comment was specifically a smear about YC, which is something I do have knowledge about. I don't for a moment believe that YC would invest in "buying out regulators and making competition illegal". That would go against everything I have ever heard, in public or in private, and everything I understand YC to be about.

Just because we moderate HN less when YC or a YC-funded startup is part of a story does not mean I won't respond like a normal human being.

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