Kalshi and its co-founders face felony charges for violating Utah gambling laws
arstechnica.com
arstechnica.com
We need at least one state to do this when large corporations violate privacy laws.
I know several people that had their lives severely impacted by these things and they were all regular people.
Libertarians are like house cats. They’re convinced of their fierce independence while dependent on a system they don’t appreciate or understand.
Now, I'm willing to accept that people will disagree about what deserves intervention and how much is acceptable. We can bicker about how much retail sports betting, guns, drugs, adult content, etc, etc, should be curtailed, that's fine.
But the hill I will die on is that people, such as yourself, who use a situations like this, where the overwhelming majority will probably want some amount of intervention as a soapbox to peddle intervention into people's private behavior for it's own sake like it's some sort of good default policy are evil at their very core and should be ridiculed, shunned and marginalized for the benefit of us all.
Same argument around banning hard drugs. They just make society worse. Obviously hard drugs are more clear cut and definitely worse for you, just saying, similar situation in principle.
jfc this is just terminal contrarianism. do we really need to debate whether it's harmful for extremely addictive drugs to be widely available? the Chinese literally fought wars over this
If we can create a situation where those people aren't breaking into cars, stripping the wire out of buildings, or dying in the street - that would be a net positive.
Prohibition has five decades of abject failure under its belt. Try something else.
I have given out a certain of points and bubbles in my life under harm reduction programs. These efforts (which I've worked at but not been central to) have had a measurable and positive impact on syphilis rates in rural Colorado among a number of other metrics.
While I think it's not great folks use, the worst parts of many of these things are created by states sanctioning things. People mess their lives up all kinds of ways and creating a black market pretty much just changes the incentive structures. It just makes it more likely folks will do fent because that's what they can find, but if they can't find that they'll drink hand sanitizer.
Unless you think that these folks should kill themselves off using tainted drugs (which was a policy pursued by the US government during alcohol prohibition), then legalization program makes some sense.
Introducing a government monopoly on things like heroin would have a lot of up-sides with the downsides largely being slightly skewed versions what we have right now.
I don't think that marketing heroin in social media apps the way gambling does is a sane idea, but I also don't think gambling apps should be allowed to market themselves.
Like a lot of things, I believe having a government undercut the market for things would have a positive impact, but depending on your view of the relationship between the DEA and the CIA you might think that is already happening but in the worst of all possible ways,
There's already causal inference evidence out there indicating that needle exchange programs reduce rates of HIV and other bloodborne infections, but increase the risk of fatal overdose. If simply making fresh needles more accessible increases overdose rates, I suspect legalizing heroin would have a much larger effect.
But I personally am not sure what the causal relationship between access "clean needles" and "fatally overdosing" is, though I would be interesting in hearing that account.
Straw man. Nobody is calling for banning gambling nationally.
For hard drugs, the expert consensus around harm reduction is supervised injection. Casinos are, in one sense, supervised injection for gambling. Kalshi, on the other hand, is the local dealer selling fentanyl to teens [1].
[1] https://finance.yahoo.com/markets/options/articles/polymarke...
You think they were fucking gambling on their iPhones in 1890? They weren’t even doing that in 2012! Get real.
Because our regime is corrupt and bought [1]?
[1] https://finance.yahoo.com/markets/options/articles/kalshi-re...
Or they could do the opposite, and just say that apps like this are gambling, which they are, and not a "futures market" that has any real value to society.
By this measure any regulation of a commons is authoritarian. Fortunately, societies with this attitude tend to bee-line their ways to ecological collapse.
"Hedging" is like insurance but the thing you're insuring against is another bet.
I support banning sports gambling/insurance/futures because it is a big onramp for foolish people to maneuver themselves into disastrous financial decisions.
Guess at which level insurance and gambling are regulated?
And then they rant about patents! Like it should be easy to come up with a pithy statement that is meant to delineate what should be protectable from what shouldn't for EVERYTHING that has yet to be invented! Like that's a trivial task!
EDIT: Looks like the 9th and 6th circuits have since agreed and rejected Kalshi and CFTC's argument.
Source?
I'm seeing "U.S. District Judge Michael Liburdi in Arizona, a Trump appointee, denied Kalshi's request for a temporary block on Tuesday and ordered the company to demonstrate why the case should be in federal court given the new state charges" [1]. That's quashing a request for a preliminary injunction. Not throwing out the case.
Meanwhile, "federal and state judges in Nevada and Massachusetts, respectively, issued early rulings in favor of states looking to ban Kalshi and its competitor Polymarket from offering sports betting in their states, while federal judges in New Jersey and Tennessee have ruled in favor of Kalshi. The Nevada lawsuit was remanded to state court."
[1] https://www.wlky.com/article/arizona-kalshi-criminal-charges...
It will go to SCOTUS due to the circuit court split.
I highly doubt it, they declined the case so the circuit split will live on for now and most likely be resolved by the legislature via one of the many bills making their way through congress. They could always take it up later but they're not so subtlety signaling that congress needs to make their intent clear on this one.
More likely a wasteful move. Federal preemption is well established.
This is a matter of whether the state laws violate the constitution.
> place restrictions on gamblers within their borders
This is a matter of if state laws have been preempted by federal laws.
Again these two things are not like each other.
I said 'commerce' not 'finance' because finance is just one of many, many things that is within the purview of federal law due the commerce clause.
Imagine there’s a law saying that regulating abortion is federal responsibility and the senate then uses this law as justification to ban demonstrations around abortion clinics. Would that mean that demonstrating next to an abortion clinic counts as abortion?
That's why subsequent courts walked it back. It was an obviously flawed ruling that produces preposterous results.
I mean, can the government prohibit dying (and throw your corpse in jail) because death means buying less food from others? Can the federal government throw you in jail for not having enough children because that reduces the amount spent on baby clothes?
[1] https://kalshi.com/markets/kxrt/rotten-tomatoes-scores/kxrt-...
Gambling has to do with putting money in a proposition, not with sports. "I bet you I can drink two points before you" is not a financial statement.
In reality, every thing we do in life is a gamble. Even investing in US Treasury Bonds. (And if you don't think so, look at the national debt again.)
I think gambling is defined by the players' behaviour more than the game's structure. There are professional poker players who I would argue do not gamble. They're playing risks as much as an insurance adjuster.
On the other hand, someone investing their life savings into McDonald's meals in an attempt to win a sweepstakes isn't buying burgers.
So the question really is, how many Kalshi and Polymarket users display signs of problem gambling? From what I'm seeing, it isn't negligible [1].
[1] https://newsroom.ucla.edu/in-the-news/la-therapists-are-seei...
2) The CME copper futures contract (/HG) is also physically settled.
/ES futures are used to hedge an SPX position or speculate on SPX. SPX options are also cash settled.
I’m not going to allow you to depose me, if you want to know more about futures contracts, CME and CBOE publish information on all of their futures contracts.
Then I won't ask you what the difference is between speculation and gambling. Instead I'll just declare myself the winner of this debate.
Prediction betting has an argument that truth discovery is economically valuable, but I don't buy it.
If prediction betting was banned, only two businesses would be affected, Kalshi and Polymarket. If futures markets were banned, many businesses would be massively affected, and almost every business would be indirectly affected.
The common language meaning of gambling is too broad and captures things that aren't legally regulated as gambling such as gambling (again common meaning of the word) with futures contracts. Sometimes gambling is dressed up a speculating, but one could argue that one can speculate as a participant in many card games since they allow room for analysis and aren't pure chance. This is what the legal dispute comes down too.
The other is the debate for the value of the truth discovery. Some folks buy it and others don't. SCOTUS will likely take the case to resolve the split between the circuits and we'll if the value of this even enters into the decision or it just comes down interpretation of the statutes.
Awfully rude.
>The common language meaning of gambling is too broad and captures things that aren't legally regulated as gambling such as gambling (again common meaning of the word) with futures contracts.
No it doesn't. No one argues that state gambling laws actually regulate the trade of securities, options, or anything actually covered by the CFTC, so this is a completely sham argument.
>The other is the debate for the value of the truth discovery. Some folks buy it and others don't. SCOTUS will likely take the case to resolve the split between the circuits and we'll if the value of this even enters into the decision or it just comes down interpretation of the statutes.
The value of truth discovery is completely irrelevant to these cases. Either congress intended to regulate sports gambling under the CFTC, or it didn't. The executive branch can't get around that.
This feels like a similar playbook to crypto. People make money through pump and dump schemes and/or luck/speculation. Then they justify their existence as some bastion of decentralized power/coordination.
I think a lot of folks here think I'm debating this because I support prediction markets, but I could have cared less which way SCOTUS comes down on this. Now I'm rooting for Kalshi when SCOTUS picks this up and not regretting the time I spent on this. I try to avoid commenting on anything political, but I had a moment of weakness while I was waiting for benchmarks to run. Thanks!
And this is what I've been trying to get at here... who can actually say with a straight face that congress intended to regulate sports gambling with the CFTC? It's a ridiculous proposition to which there are no actual facts that support it. Nothing in the congressional record, nothing in the statute. Just a broad reading of the language while keeping one's head in the sand.
The reference to bingo was something that New Jersey and the dissent brought up. Direct quote that covers both: 'Because Kalshi’s sports related event contracts are traded on a CFTC-licensed DCM and depend on event outcomes associated with economic consequences, they fit within the Act’s definition of “swaps” subject to the CFTC’s jurisdiction. See 7 U.S.C. §§ 2(a)(1)(A), 1a(47)(A)(ii).
New Jersey and the dissent “pile inference upon inference” and postulate that anything from bingo games to pingpong matches will fall under the CFTC’s jurisdiction.'
from: https://www.courthousenews.com/wp-content/uploads/2026/04/ka...
That the holding opinion addresses, quoting the same exact section you did and then going on to say that "[i]n such far-fetched scenarios, Congress’s express delegation to the CTFC and the Securities and Exchange Commission to 'further define' swaps would prove useful." So yeah, that exact point stands.
>The 3rd circuit literally said they are '"swaps" subject to the CFTC's jusridiction' which is literally the opposite of what the 9th circuit said.
No, the 3rd circuit literally said that the CFTC designated Kalshi a DCM, so therefore it must be the case that its sports events contracts fall under DCM event contracts regulated by the CFTC. This is much more limited than my construction of the 9th circuit holding, which you insisted this is the opposite of it.It's literally not. The 9th Circuit's holding goes much further than to say they aren't a DCM. It says that a sports event can't be an event contract under the CFTC, so it does not even matter if it is a DCM or not.
You had me thinking you read the opinions when you came with the quotes, but it seems like at the same kind of superficial level the 3rd circuit is playing around at here. The 9th Circuit's holding is much broader and addresses the fact that the DCM designation is basically a sham, and clearly well beyond whatever congress could have intended with the statute.
And it's funny that you act informed about this but are playing ignorant the politics of the Trump admin's cronyism with Kalshi and its sudden and unprecedented designation of it as a DCM. Resting in the shallow depth of the 3rd circuit's opinion isn't a good place to be when you really think about what that court represents. And do you really think the supreme court is going to say that the executive branch can decide what congress intended by making designations like that? Fat chance. There's nothing in the congressional record that could ever indicate an intent to give the CFTC power to preempt state sports gambling laws on an individual corporate basis by special designation.
I feel like you're just interested in this for the culture war politics of it and take up the law as a barb. You're just being rude up and down this thread with your intuitive arguments which are really just legal non sequiturs but you don't get that because you don't do actual legal analysis (which is fine, I see all sorts of analyses on this site that I can't do, I just read in those circumstances).
Edit: 2nd circuit denied Kalshi's request for an injunction against NY's enforcement. So yeah... I think I'm within pretty good grounds to reasonably disagree with the 3rd circuit. You really just come off like a buffoon.
The event contract isn't tied to the delivery of a good or service.
In what? Source?
CFTC seems to be preëmpting state gambling laws under commodities regulation (specifically, as "excluded commodities"). That sounds, to me, like a major question. The sort Chevron deferred to regulators. The kind our current SCOTUS says should be decided by the Congress. To my knowledge, the Congress has said nothing about prediction markets. Which means it's in the domain of states.
Otherwise, fuck it, let's launch a prediction-market based national health insurance market. I'll sell you a contract that pays my medical bills if I have a health event.
Wall Street has been trying to argue this for ages [1]. To date, it hasn't worked.
[1] https://cdn.ca9.uscourts.gov/datastore/opinions/2025/08/06/2...
So I wouldn’t be surprised under the right social and cultural conditions and the right people in power that it could become regarded as a protected liberty. It is rather frightening that this relativism – deprived of objective anchors and standards – doesn’t strike people as terrifying. Too many people take for granted the status quo they are accustomed to, or they are so fixated on satisfying some appetite du jour that they fail to grasp the waiting Dionysian fallout[0].
[0] https://chs.harvard.edu/primary-source/euripides-bacchae-sb/
My general position has been that the durability of the Bill of Rights is directly attributed to what you call "relativism". When the government finds the Bill of Rights to be unpleasant, they simply decide it never applied in the first place.
Congress didn't identify the markets it was regulating by common names or trade names. It doesn't matter if its generally called a prediction market, a commodities market, or a futures exchange. What matters is if it qualifies as a Designated Contract Market as per https://www.ecfr.gov/current/title-17/chapter-I/part-38 so if you want to actually have knowledge of what Congress said on this topic your going to have read all of that.
There is already a split decision on this between the 3rd and 9th circuits so it seems likely SCOTUS is going to take this up. I expect they'll be the ones deciding if this in the domain of the states or not. If they don't pick it up then its going to vary by circuit, such that it will be in the domain of some states and not others.
DCMs are a creature of rule, not statute [1]. The statutes that animate it are the CFMA of 2000, Dodd-Frank "special rule" for event contracts and CEA § 5. The core question, whether the CFTC has the authority to regulate this kind of DCM, is still open.
> There is already a split decision on this between the 3rd and 9th circuits so it seems likely SCOTUS is going to take this up
Links to the split opinions?
[1] To be clear, DCMs are undefined in statute. DCMs are just referenced in other statute. Part 38 is an implementing regulation.
Seriously? That is easy to find, so I'm just going to skip past that to the petition to SCOTUS that references both: https://www.supremecourt.gov/DocketPDF/26/26-299/428759/2026...
If that's your only source, I'll rest my case–it make the argument cleanly.
Its seems like there is literally nothing you will accept to show that this isn't settled yet.
To the extent I’m challenging anything above, you’ll see it’s in rejecting anyone claiming this is obvious or settled.
Edit: 2nd circuit denied Kalshi's request for an injunction against NY's enforcement. So yeah... I think I'm within pretty good grounds to reasonably disagree with the 3rd circuit.
Predictions aren't swaps as defined by federal law. If they were, the term "swap" would be so broad that every transaction and exchange of value in the world would be within the CFTC's jurisdiction, excluding those the CEA gives to the SEC.
The only reason the prediction market hasn't already been shut down is because multiple members of the president's family are heavily invested in the industry.
I don't think it takes much boldness, so my condolences to anyone who needs to hem and haw over that decision.
It does raise the question, is waiting for the full picture when the full picture is ruining more lives for not much gain at all to anyone really a good idea?
As to your general point, I agree. We must be bold and say the right words online lest a stranger think we are terrible people because we choose our words to mean things instead of to signal our morality.
If you've somehow missed how these companies act then I'd say you're missing the table stakes to even discuss them: saying they're "everywhere" would not be an overstatement.
Also I don't get why you're clinging to morality as a loincloth: is there a logical reason to allow any of this? Even if you're a lover of all that is vice, we had gambling!
We don't need Kalshi to allow it: they represent a form of gambling that is less regulated, more susceptible to manipulation, more likely to cause unique adverse effects in the real world as people become incentivized manipulate arbitrary events it tracks.
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You're confusing amorality with objectivity. If you're our resident expert on what words mean, the broadly tolerated concept of moral objectivity shouldn't be foreign.
And it's less contentious to apply it when instead of saying "Gambling is bad", we're saying "Allowing a private company to turn any arbitrary event in the natural world into an always available, poorly regulated, aggressively advertised lottery tickets is bad".
Regardless of if one considers gambling moral, the latter is bad to most logical persons. Ironically the stubbornness with which you're ascribing personal morality to other people for saying that is by far the loudest attempt to signal personal morality in this comment section.
Obvious connotations aside, withholding judgment isn't a neutral or objective position when the harm is ongoing. It’s effectively arguing for the status quo.
We're feeling the effects of broad-spectrum gambling addiction. It's hitting our kids. It's hitting our young men. It's hitting our elderly. Restrictions on social media, regulation around gambling and folks trying to drink less are all, it seems, part of a common theme.
Is there any evidence these markets actually provide useful predictions?
Kalshi had Abbot solidly in the lead (polls were closer to final accuracy) until the minute enough votes came in for news orgs' forecasting models to tip the race to Lean D, and then plummeted to 0%.
On balance it seems like they provide little to no uniquely valuable information for anything that matters.
https://kalshi.com/markets/govpartytx/texas-governor/govpart...
Note that for the Texas governor, Kalshi had Abbott at 60+% on election day and he lost by a _million_ votes.
There will always be cases where everyone is surprised. If you have a useful predictor that means it incrementally helps improve your expectation. It doesn't eliminate surprises.
There are plenty of legit critiques of the prediction power of these markets, but they typically don't involve pointing at single observations. The overwhelming scholarly consensus is prediction markets are highly accurate relative to other forecasting methods, but have also significant biases. Such as long-shot bias, etc.
But those biases are small enough that they are only resolvable by looking at lots of independent at-bats. Real-world consensus was not that Abbott would get smoked to that extent, and so of course that consensus was exactly reflected in prices. If you read a lot of pre-election commentary (I was reading primarily Democrats) you would realize that people knew something was going to happen, but they really had no idea about the extent.
Furthermore, we don't learn a lot (anything really) about efficiency by looking at a large number of events that are highly correlated. And of course the whole blue wave was correlated events, so yes you will find a lot of "bad" prices, in terms of raw numbers. But taken together they are really one observation.
See this huge study on political bias: http://www.nber.org/papers/w35846.pdf (Spoiler alert, if there is one it's incredibly small.)
I have heard and seen: Bet's on the live & fate of a celebrity, person, company, country, weather etc.. It's getting absurdly criminal. You've seen the guy in France burning a weather-sensor, just so he wins a bet. The soldier's knowing their mission and "secretly" betting on the death of their enemies. This is getting beyond dark and unethical. It's maximally anti-social and destructive for humanity.
If Polymarket/Kalshi and co. continue roaming free, we'll eventually see parts of humanity circling a death spiral like ants do.
We shouldn't be able to bet on bombings and wars, even without considering insider trading
Can you share a link to this? Googling "kalshi athlete deepfake" didn't turn up anything.
Given that gambling, almost by definition, requires exchange of money (or something approximating money), it's much harder for the Kalshi's and Polymarket's of the world to credibly claim that they didn't know a user was in Utah (for at least the ones domiciled in Utah).
They could take payment only in crypto, but I suspect that you can't run a federally-regulated commodities futures exchange without a certain amount of KYC (if for nothing other than AML and income reporting) that makes it practically infeasible to pretend you didn't know.
The other law was about porn that I guess wasn't always paid for, so yeah.
When I lived there online poker and day trading was the extent that what seemed like a smallish fraction of the population was into. Though a lot of people watched poker.
Now it seems like there is a whole generation of people betting on everything from football to heads of state getting removed from office.
Also, my understanding is throwing sporting event is normalized. I saw a football highlight where a receiver basically ran out of bounds when he could have easily scored. It looked sketchy asf.
As for Kalshi, if it’s not gambling what is it. I’m not buying the derivative framing. There is frequently no underlying asset to own and no way to apply mosaic theory. So it’s gambling in my book. I don’t feel sorry for Kalshi’s founders for the Utah AG throwing the book at them.
In the 2010s the TV networks normalized fantasy sports into sports betting. The vehicle they used for this was through the 45 second commercial advertising breaks that run every 2 minutes during American football games, and then across the other important American sports thereafter. If you were a regular watcher of sports in the US you've been brainwashed over the last 10 years into thinking this is ok. Some are aware of this, many are not.
I think gambling should be legal, but should be illegal to advertise. Just like the government settled with the tobacco companies to restrict advertising, we should do the same with gambling companies. No advertising.
It's hard to regulate advertising when the store itself is the ad.
they were never an innovating marketing play... it was the culmination of a gambling company committing to regulatory capture as evinced by Donald Trump Jr (totally not) sitting on BOTH BOARDS as a "paid strategic advisor" or whatever lie they want to spin.
With enough funds, smaller political races can be gamed.
And it's terrible and going to destroy sports.
Bots Rule Everything Around Me BREAM dollar dollar bill yall.
like, of course the gambling halls drop big money on online marketing
To me it's absolutely crazy that the "gamble on anything" apps are being advertised as some kind of polling software. I've already seen at least one race called into question because the gamblers bet on the wrong pony.
They're pure corruption engines designed for insider betting. The top brass of these companies need to be made example of.
is there any surprise then that Trumps are on the boards of both?
i would not premise an anti-prediction market argument on their accuracy being bad, you are building on shaky foundations. the better argument is the paternalist protecting stupid people from themselves imo.
Here is their official stance on gambling: https://www.churchofjesuschrist.org/study/manual/gospel-topi...
I am not sure how much, if any, impact or influence this has had on Utah law.
Like, are there some gamblers who, if it were made illegal, would do it illegally in harmful ways? Yes! Are there enough such people that the social harms of banning gambling would be significant? I don’t think the data bears that out. This isn’t prohibition; this is something that has already been widely proscribed by law in the past without serious negative consequences (other than missed opportunities for riches on the part of the gambling companies that pushed to relax those prohibitions over the last decade).
https://leg.wa.gov/state-laws-and-rules/washington-state-con...
>SECTION 24. LOTTERIES AND DIVORCE
>The legislature shall never grant any divorce. Lotteries shall be prohibited except as specifically authorized upon the affirmative vote of sixty percent of the members of each house of the legislature or, notwithstanding any other provision of this Constitution, by referendum or initiative approved by a sixty percent affirmative vote of the electors voting thereon. [AMENDMENT 56, 1971 Senate Joint Resolution No. 5, p 1828. Approved November 7, 1972.]
>NOTES: Original text — Art. 2 Section 24 LOTTERIES AND DIVORCE — The legislature shall never authorize any lottery or grant any divorce.
Everyone knows the state of Utah is largely run by the church.
Surprisingly few people know this ime. It's worth pointing out as one of the few areas [0] where the church has as much pull as its members think it does.
While I wouldn't look to the church as a bastion of morality for So Many Reasons, it's worth looking at a hard example of how it is able to manipulate politics in Utah, and by extension nationwide.
[0] Other areas worth being aware of are Idaho and parts of Arizona of course.
Given the way that the church has explicitly encouraged state legislators to shoot down recent laws it's not surprising to think they'd be pushing for this.
Also it's the only time I've seen nonaffiliated news articles about a statement the church has made about a topic other than lgbtq rights or abortion - notably much more politicized topics in general. That may be due to my own inattentiveness however.
All that to say that calling it "the main topic" is incorrect in technicality, but not in impact imo.
And the way they've influenced voters in Idaho and Arizona recently.
... Gambling is motivated by a desire to get something for nothing. This desire is spiritually destructive. It leads participants away from the Savior’s teachings of love and service and toward the selfishness of the adversary. It undermines the virtues of work and thrift and the desire to give honest effort in all we do.
Those who participate in gambling soon discover the deception in the idea that they can give little or nothing and receive something of value in return. They find that they give up large amounts of money, their own honor, and the respect of family members and friends. Deceived and addicted, they often gamble with funds they should use for other purposes, such as meeting the basic needs of their families. Gamblers sometimes become so enslaved and so desperate to pay gambling debts that they turn to stealing, giving up their own good name.
Now, Robinhood is a brokerage, regulated by FINRA, and has been fined for misbehavior in the past. So I am more than willing to believe that there is daylight here that I’m not seeing. But anything that lets you speculate attracts a certain clientele, and I think the most important distinction is whether or not the platform itself is an interested party.
Lots of folks gripe about how Kalshi adjudicates contracts.
&&
policy makers, assistants, journalists, and the like are insider trading - and the president of the united states is intentionally market manipulating for profit
Also speculators serve an important purpose: hedging strategies require speculators on the other side. It is not just a "certain clientele," there are people who run profitable businesses on speculation (it amounts to collecting insurance premiums from people who want hedges).
Really it sounds like this is a disagreement about what it means for a market to be "regulated" -- I draw the line at compliance, you seem to draw the line elsewhere.
The CFTC was created to hedge real risk. Onions iirc?
Kalshi creates risk where there was none before. The 'future' on the 'commodity' of 'number of dunks by an aging shaq at a halftime show'.
Courts have taken the dimmest possible view of this legal fabrication and I expect their losses in courts to continue without direct intervention by the Trump scions.
As an excluded commodity. Based on the CFTC's own rule making. Based on this logic the SEC can go back to deciding it gets to regulate anything as securities fraud.
You have lots of recourse if you lose money through your stock broker. Kalshi, on the other hand, is less regulated than a casino.
Of course there is. If the broker improperly evaluated your suitability to trade options, you'd be able to–at the very least–cost them tens of thousands of dollars in compliance costs. In all likelihood, a retail investor taking their broker to FINRA arbitration has even odds of prevailing.
And even in the extreme case that you did file a claim and you were awarded damages it would probably be only for a fraction of what you lost
What are you basing this on?
Sure. What are you looking at?
> common sense
There's your problem.
> real world experience with options trading
Did you ever take anything to arbitration?
For what it's worth, former options market maker here.
The number seems very small compared to the sheer number of retail investors that lose money on options and a lot of these don't even go in favor of the complaintant either.
Just to clarify I'm not talking about somebody doing some sort of complex options play that ends them up in debt when they are 17 years old or something like that.
I'm talking about the average case where somebody signs up for a brokerage account, funds the account, accepts the disclaimers and fills out the questionnaire to do options, is approved for level one, buys some call options, and they all go to zero. Why should they get their money back?
Most retail investors don't complain. And most brokerages settle before going to arbitration, because the win rates aren't great and either way it winds up on your record.
> I'm not talking about somebody doing some sort of complex options play
Those are actually more likely to go against the investor. Someone making an over-leveraged nonsense play is more sympathetic. (Or, investor was an idiot but broker failed to file a trade report on time or sent a stupid text or whatever.)
> Why should they get their money back?
Big question. Simpler: they do. A quarter to a third of cases between '21 and '26 resulted in customer awards, per your source.
Right, only a quarter, and that is just any award, it could be 10% of what they lost
Sure. It’s still (a) a huge pain in the ass for the broker and (b) more than anyone will get from Kalshi.
If you either (a) treat it like gambling or (b) don't participate at all because you think it is gambling, then I am sorry for your sake.
If you have advance knowledge of an attack, there are much less conspicuous ways to profit off that.
What about this administration makes you think that's important to them?
it is true that a smart operator may like to profit only in the less conspicuous way, but what would cause you to think that applied to Trump and his family?
Granted, the son whose wedding you skip has got to be lower down the food chain.
This is a bad take. What they are doing is quite obviously legal right now. Federal law trumps state law and the feds have an opinion, despite being weird and controversial.
There are a number of ongoing legal battles about the federal laws but until they work their way through the courts, it's "legal". Also, it could all get resolved with a new presidential administration in two years. This is the correct solution.
We shouldn't cheer for personal prosecutions over definitionally legal activity. Nothing good will come of it. See also: Sending mifepristone across state lines, or traveling out of state for abortions.
Federal law does not categorically trump state law.
https://en.wikipedia.org/wiki/Federal_preemption
Whether pre-emption applies in this case depends on whether the courts accept Kalshi/Polymarket's claim that they operate a futures trading platform, not a gambling platform. If and only if that claim is accepted is there a pre-emption argument, and only then would the opinion of the Commodity Futures Trading Commission be relevant.
As long as the business is legal to operate, there is no justification for criminally prosecuting the people engaged in that business.
"As long as the business is legal to operate, there is no justification for criminally prosecuting the people engaged in that business."
You are begging the question: assuming that the business is legal to operate in the state of Utah. You keep presenting Kalshi's arguments as though they enjoy some presumption of legality prior to a ruling.
"until they work their way through the courts, it's "legal"" is a much better phrasing and if the comment had stuck to that it probably wouldn't be downvoted.
No. There's no "states must permit gambling" Federal law for state bans to conflict with currently; states are free to ban it.
https://en.wikipedia.org/wiki/Gambling_in_the_United_States
"While gambling is legal under U.S. federal law, there are significant restrictions pertaining to interstate and online gambling, as each state is free to regulate or prohibit the practice within its borders."
Matt Levine has gone into great detail about the legal chicanery that brought us here, but it summarizes as "it's not gambling, it's futures trading".
This seems like nonsense to you and me (and Matt Levine), but our opinions are irrelevant here. The courts' opinions are, and so far they've been coming down on the side of the prediction markets. Mostly.
So by definition - as weird as it is - it's legal. So far.
Sure, just like storing a bunch of classified docs in a Mar-a-Lago bathroom was.
You are mixing up "currently getting away with it" for legal.
Courts move slow, especially when the party being targeted has a lot of money. Them allowing Kalshi to operate isn't an endorsement, it just means they don't see what Kalshi is doing as a significant harm. The injunction to stop them from operating in Utah is still winding it's way through appeals.
Whether or not what they are doing is legal is not determined until they either settle, Utah drops the case, or the trail and appeals process determines that they are not guilty.
Obviously not. You know how you can tell? Police will stop you from doing it.
"Kalshi and its co-founders face felony charges" would seem to describe that process, yes? The same first step a fentanyl dealer would encounter?
Swap out "selling fentanyl" for widely tolerated but often still illegal jaywalking if you like.
I don't think your fentanyl dealer will receive the same treatment. They aren't even taking away the "drugs" from Kalshi.
Police will stop you from recording them, is that illegal?
Cops don't show up for civil offenses and most criminal offenses (particularly white collar offenses). Cops are also notoriously bad at understanding the law. Funnily, an illegal arrest is a good example of where the cops don't show up to arrest someone for breaking the law.
You are using faulty logic to determine what is and isn't legal.
Even if you are a state legislator, and federal courts are mixed, you should write the law to raise the issue salience and get the federal law tweak.
Courts really are not the end-all-be-all when we're talking about legislators making laws, that's silly.
The Second Amendment isn't even really Federal law, nor is the rest of the Constitution. It's the supreme law that sits above Federal/state law and constrains what Federal/state laws can do.
(And the Tenth Amendment protects state laws significantly from Federal laws, where applicable.)
The Fugitive Slave Acts were two of these conflicts. The first one overruled any state that offered sanctuary while also making it a federal crime to assist runaways. The second one aggravated tensions between slave states and the rest of America. Under the Fugitive Slave Act of 1850, it was not legal for a suspected runaway slave to deny being the slave described in the paperwork. States were required to assist slave catchers. Also, suspected runaway slaves were not permitted any sort of trial. It legalized kidnapping any black person who vaguely fit the description on the paperwork.
https://en.wikipedia.org/wiki/Fugitive_Slave_Act_of_1850
Prior to the Commodities Futures Modernization Act of 2000, some states regulated credit default swaps as insurance products while some state's statutes said that CDS were gambling (and outlawed it completely). The CFMA overruled the states that had outlawed CDS. This was one of the major causes of the 2007/2008 financial meltdown.
https://en.wikipedia.org/wiki/Commodity_Futures_Modernizatio...
I despise gambling and would very like if there was less of it. But that's not a legal opinion, those are just my feelings. There are good faith legal arguments that these state laws cannot override federal laws and that the federal laws allow these prediction markets. We live in a country with an enormously complex legal system and with a volume of legislation that is, without question, far beyond what any single individual could reasonably comprehend. This often means that what is legal and illegal is unclear. I think this is one of those circumstances.
all of this stuff is very obviously sports betting. Kalshi can say the piss on our pantlegs is rain, but I don't feel very obligated to belive it. I recognize the legal argument, I personally think it's bunk, I think it's reasonable for a legislator to say it's bunk, and it is hardly settled to say that Utah can't do this.
In fact, we rewound to, say like 2010, this would be completely obvious that Utah is correct.
I haven't read the CFTC Act of 1974, but I've read opinions of respected lawyers and legal scholars on this issue and there doesn't seem to be a consensus. I think there's a good chance this one goes to the supreme court. SCOTUS doesn't usually weigh in on things that are "facially ridiculous."
It seems many people seem to think our justice system is now just a sham, but I think that at present, despite its many flaws, it is by far the most well functioning branch of our government and that more often than not, the courts are making a good faith effort to do a difficult task.
If I were god-king would I make legislation to ban prediction markets for sports events and such? Without question. Is it obvious to me that our current set of laws does not grant the CFTC jurisdiction over this? I guess not.
* laws that ought to exist
* how existing laws ought to be interpreted
* whether a given interpretation is correct
* whether a given interpretation is good
and that the court attempts to interpret and apply laws, not create them? And the legislature can just change laws if they don't like what the court does?
Just because some highly compensated lawyers, and some who wish Kalshi would butter their bread, throw some dust in the air doesn't mean we have to strap on a dunce cap and pretend a bet on the superbowl is really a commodity future. We don't even have to pretend that's a reasonable opinion to have.
Kalshi has a serious uphill battle here. As the Judge said in granting Utah's motion and delying Kalshi's motion for a preliminary injunction:
> Shelby determined the text of US law makes it clear that state regulation is not forbidden. US law states that CFTC jurisdiction does not “supersede or limit the jurisdiction conferred on courts of the United States or any State,” and “explicitly provides for State regulation of its gaming laws in all but a few specified cases,” he wrote.
> “Congress is aware that some States permit gambling while others do not, and the CEA explicitly provides for State jurisdiction,” Shelby wrote.
Judge Shelby’s interpretation quoted above seems in conflict with how the 3rd circuit ruled in Kalshiex v. Flaherty, which is why I think the law is not entirely clear yet. I would be surprised if SCOTUS eventually weighs in
These founders should be in prison for promoting illegal gambling. Same federal charges mafiosos get caught on for a "friendly card game".
I would amend your “breaking the law” comment to “willfully ignoring all regulation, taxes, and labor provisions” perhaps but, same sentiment.
As for the gambling bits I guess if I had to answer it would be property investors that bought thinking they could rent on AirBnB - speculation but also driving up prices in popular areas to price out locals.
On the other hand, I've come around to the view that sports betting is a net unqualified bad -- and I didn't necessarily feel that way before the Kalshi/PM explosion.
Which has led to the interesting phenomenon that a sequence of Pareto improvements (each of which makes everyone better off) has seemed to leave everyone worse off.
How the hell is that leaving everyone worse off?
A lot of these companies have taken this approach. Break laws until someone finally notices AND does something about it. The runway to a slap on the wrist is often times more financially beneficial to companies - there is no incentive to stop if you run a billion dollar company and breaking the law gets you a $50M dollar fine you make back in a single month.
I thought SOX (Sarbanes–Oxley Act) was supposed to prevent a lot of this, but I guess companies just continue to find loopholes to exploit.
You might want to look up Barcelona and the issues airbnb causes there. Basically it follows out the cities as you can make way more money doing Airbnb than renting to people living/working there.
As to Uber, I'm not sure if the driver experience is unambiguous good. For some, sure. For the ones that depend on it, I'm sure they'll disagree
Uber drivers are welcome to no longer drive for uber if they don’t enjoy the experience.
This is obviously a fallacy under our current economic system; workers are not "free to choose whatever job/occupation" they'd like. Their circumstances (material conditions) dictate what they can and cannot do for work, and in some places, driving for Uber is about it, at least for a part time gig that can fit around a primary job (since many Americans at least must work in excess of 50 hours a week to afford food and rent).
So, instead of punching down and saying "man, just get a better job" we could recognize the realities of the world and hope we can make the conditions of drivers better. Uber, or a system like it, at least if we are forced to have car-centric infrastructure, should be a net good. At the moment it is not.
It should have more protections too, I'm not arguing against those. I just think "it's the only job some people can get" is often a bad argument. And it's often used to perpetuate bad systems.
(Competitive doesn't mean the same price per night - there's also factors of cleaning and occupancy rate)
Are they?
The drivers have a certain set of capital and skills, and Uber (and to a lesser extent, Lyft) have created a near-monopoly on the market to buy services produced using that capital and skills. Since the ability to execute a transaction in that market is severely compromised if you don't work by Uber's rules, you are effectively outside of the marketplace if you no longer drive for Uber. You make no money. You go broke. You don't have the capital necessary to effectively compete in the market for giving rides in exchange for money. They own your skills and capital in all but the legal sense.
If there were either real, multi-company competition for Uber's market share, or a larger amount of regulation upon their monopoly, it'd be a different story.
Of course, there are people who think that monopolies are good, but that seems to be counterintuitive to anyone with a basic grasp of human nature and history.
The skill of knowing all the roads stopped being important a decade or two before Uber even started.
This isn't a rhetorical question. As far as I know there are only two globally - Uber and Lyft. If most of what you need is a web server and a lawyer, shouldn't there be ten of these in every city?
Uber is a major driver of the gig economy and all the lack of worker protections that that includes.
They’re also arguably a major driver/originator of DoorDash and Uber Eats, a company that famously takes an enormous percentage of every restaurant’s order fee, compounding either the increase in costs of restaurant food, or causing restaurants to struggle further or both.
They’ve done good - they’ve made it easier to get a job when you otherwise can’t, and they’ve reduced car reliance for some people; but “unambiguous good” is too far a bridge.
If a restaurant doesn’t like the cut taken by DoorDash they’re welcome to not participate in DoorDash. As far as I know, neither company has ever forced a restaurant into participation.
DoorDash got sued by In-N-Out for doing this. https://www.eater.com/2015/11/11/9714840/in-n-out-doordash-d...
The parent comment was complaining about the fee that DoorDash charges the restaurant.
Is that link going tell me that DoorDash was charging restaurants non consensually? That would be very tough for me to believe
That being said, they weren't effectively offering unregulated gambling on any difference of opinion. Gambling is a vice. We've made it a regulated vice, but it's very much still a vice. If you get rid of the "regulated" part, people, including those with the ability to present a case in front of a grand jury, are going to see you as a 1980s cosa nostra capo and act accordingly.
The problem lies in the legal gray area of what constitutes gambling, and therefore "illegal" gambling. That's what the courts have to decide.
I think most people would say this is gambling. But our legal system has to rule on that before we can start putting people in jail for it.
We should! Finally incentivize rich people to not screw over the rest of society for a quick buck.
Yes. This is what we do in the United States and most of Western Europe. This is how countries like this function
I doubt that you would be happy with the outcome, certainly not if you had to actual deal with such a legal system. Plain language laws sound great in theory, but in practice the result is a rigid system that is easily manipulated by bad actors and which becomes oppressive to honest people.
"No, I am not marketing a tobacco product, I am marketing a product that produces nicotine from other chemicals, then vaporizes it to be inhaled!"
"If I had not done it, my children would have been seriously injured, are you really going to imprison me for protecting them?"
In general, whenever a society tries to apply its legal code, it will begin to develop judicial law by necessity -- at some point you will have to deal with borderline cases where it is not clear if the law was broken, no matter how clear the language of the law might appear. Here is an ancient example taken from the bible: the death penalty shall only be imposed on the basis of testimony from two witnesses. OK, seems pretty clear, but we know from the Talmud that questions arose when the law was applied -- who counts as a witness, what counts as testimony from a witness, etc.
Also keep in mind that no matter how plainly laws are written down, over time you will wind up with a large number of laws as society deals with changing conditions and unforeseen circumstances. Inevitably you wind up with contradictory laws and you do need some process for resolving the contradiction and determining which law should be applied.
The rigidity concept you talk about effectively exists in our current system, too, it's just a matter of perspective. If the law is written in such a poor way so as to need review, and the legislators and executives in on the bill know where the jurists who will review it stand, theyve effectively got the different, rigid law they wanted until someone decides to review again. Review, with no particular cadence, or urgency, etc. I actually do think review is good, but it shouldn't stand in for actual legislation (which since about the 80s it has, largely due to Reagan era deregulation)
Maybe the breakage is somewhere else -- I talked about Citizens United elsewhere, which effectively lets corporations buy votes from legislators, and we know at least 2 of the current justices are flat-out corrupt, getting gifts and financial help from millionaire and billionaire friends.
Until a judge says it's a crime, it isn't. Innocent until proven guilty etc
Yes, we wait for the courts or the legislature rather than resorting to mob justice. There are good reasons for it. The most obvious is to ensure that the corrupt politicians do not use the power of the state to arbitrarily oppress and persecute people. Another is to ensure that there is no doubt about guilt when we convict someone, and to avoid arguments about the penalties being arbitrary and unfair.
Really though, establishing courts to deal with accusations of people breaking the law is something most societies converge on at some point. "Joe was only ordered to spend 5 years working the fields, so why should Jim be executed for doing the same thing????" amounts to a rudimentary form of judicial law -- pointing to a precedent from a previous case to argue the current case.
But if you know better then maybe you should just decree from the courtroom in your house and send your ruling to the AGs of all 50 states.
Like, do you have any actual argument as to why it's not gambling, or are you just going to hang it on this plausible deniability? It's not like they knew the 3rd circuit would decide in their favor anyway, so I don't really think your point is the slam dunk you're acting like it is. They knowingly engaged in activities that most states consider to be gambling. They aren't even really denying that. They are just saying it falls under federal regulation, but the argument for that is so shockingly poor, it's hard to imagine how the 3rd circuit's decision could stand, but its only on a preliminary injunction anyway, so it's still not quite a merits decision. The third circuit said that by its own logic, Congress must weigh in on whether or not "bingo" is a swap regulated by the CFTC. If you can't understand how facially stupid that is, I don't know what to say.
Yes I think what they are doing is illegal and they should not be permitted to operate outside the gaming regulations of individual states.
But it doesn't matter what I think. I was trying to have a conversation about the gray areas and why we don't just send people straight to jail for trying out a new, novel, (and potentially illegal), business model.
The courts are figuring it out.
>I was trying to have a conversation about the gray areas and why we don't just send people straight to jail for trying out a new, novel, (and potentially illegal), business model.
Actually we do. If a court finds your activity was illegal, you get the according punishment. The court doesn't say "oh gee golly, you're guilty but we'll let you off for this one because who could see it coming!"
>The courts are figuring it out.
The courts figured it out. It does not matter in Utah state court, what the 3rd circuit thinks. It is not binding precedent in Utah state courts.
Why are casinos operated by Native Americans legal but casinos operated by black people illegal?
I don't think "illegal gambling" is illegal for the reasons you want it to be illegal.
You might want to look up what the reservations are, legally speaking
You don’t even have to read the article, the headline says it all…
As far as what the current state of the world tells you, what would you have done then? Should Utah have dispatched assassins? They are taking the leaders of the company to criminal court. I can't believe I have to stand up for Utah here.
There are many more steps in the justice system where they could get off easy, and there’s plenty of precedent for that.
We play this game on HN every time anyone is charged. When Holmes was being sentenced there were still folks on here who were convinced (with zero research or evidence, of course, just vibes) it was a scam.
Thankfully that part of the law didn't stand under closer inspection. As anyone on this website should know, it's technically impossible to identify all VPN users or geolocate VPN users behind their VPN. Anyone can set up a VPN on a raspberry Pi and leave it at a friends' house in another state. Under the law they tried to pass, adult websites would be liable for this.
The legislation in my example wasn't a hypothetical slippery slope. It actually passed. This was part of what they were trying to regulate.
https://marginalrevolution.com/marginalrevolution/2026/10/pr...
Obviously not compelling on its own though.
This seems like a relatively small inefficiency in the markets, no? If the margin of error notable in a prediction markets is <10 cents per dollar, that implies that they are pricing events pretty accurately. Especially post publication of this paper, when sophisticated traders could trade away this inefficiency.
Somebody needs to tell Utah it needs to change its laws to adapt to their business plan, ASAP.
Closes tab.
I'm sure Trump Jr's role/stake in both Kalshi and Polymarket has nothing to do with it.
In the times I traded sports contracts, I was able to reverse a trade during the event to prevent a total loss of contract investment, and buy back in if the momentum changed. But usually for the times I bought sports contracts and allowed it to complete, I was outperforming the stock market on a daily basis.
The only stock market trade that outperformed was BWET at the start of the Iran War.
Even insurance is similar, Kalshi markets can be used as a form of insurance.
Yet AFAIK Utah doesn't ban either of those.
In 2018, SCOTUS ruled sports gambling was the domain of the states.
Like a resort hedging their income against bad weather.
Or a sports bar hedging their city's team getting knocked out of a tournament early.
And that's the part where you ask yourself, "I wonder why that is?" and "Do my analogies parallel reality as much as I currently think they do?"
Or I can cut to the chase: cut the crap, it's gambling and you know it. Semantic pedantry isn't going to convince anyone to the contrary.
In addition to being utterly terrifying, this would fall afoul of the "cruel and unusual punishments" thing /s
(What a typo)
If the federal government says it's not gambling, then does a state get to say it is?
States can't just override federal law with their own laws.
Given that their primary business is literally sports betting -- it's going to be a tough battle.
The only reason it has gone this far is that the current admin's family is personally invested in this bullshit.
It makes sense why they went towards sports gambling, because the market is so big.
It would be interesting to see how frequently Polymarket predictions bet against the most common prediction and by what margins.
Polymarket projections do not provide investigative insight, as in the Berkshire Hathaway example. It's just gambling. Any influence drawn from these predictions is incidental and reactive, as opposed to active market forces like buying/selling.
There is plenty of data that shows they actually don't work very well outside of surfacing insider knowledge (which the commercial prediction markets superficially pretend to be against).
For events where you can't have full picture insider knowledge like elections, prediction markets are pretty awful at accurate predictions.
Most uncertain things that people need to hedge (currency, commodity prices) already had a hedge.
In practical terms can someone really give me an example of how they benefited from knowing the future (materially, not emotionally) from a prediction they got from Kalshi? I am honestly curious.
These are not polling places, they are places for capital to influence odds.
Small elections are susceptible to corruption this way, though.
That's way too narrow of the categories. Here are some more cases, and you tell me where can I hedge it? And don't tell me the answer is "go to Goldman Sachs and they create any kind of derivatives to hedge for you", that only works if you are a huge enterprise. I'm talking about SME, or even one person company with $1-5M ARR.
(By the way, I do trade on Polymarket / Kalshi, had a job interview with Kalshi many years ago but did not take their offer since I disagreed a lot with their product design. So all of this is my own opinion).
1. Suppose I run an ice cream shop in midtown Manhattan, and my foot traffic depends on how good the weather is. If it's sunny and dry, I expect a lot of traffic, vice versa, if it's thunderstorm, hurricane or snow, I would run the day without any revenue (and a lot of ice cream waste). What is the way for me to hedge weather risk that could seriously affect my business?
2. Suppose I'm a restaurant owner in Koreatown in LA, and during World Cup I run a restaurant expecting a lot of Korean coming to my area (and my restaurant). So I would ramp up my business, hiring a lot of staffs, sourcing a lot of ingredients from the vendors. Then the biggest risk (and anticipation) is that Korea would be knocked out very early, which unfortunately that precisely happened. So the foot traffic evaporated, and with that the revenue. How could I hedge that risk?
3. Suppose I'm a distributor / reseller who needs to import goods and products from other countries and resells it back to US for profit. Barring the import / export regulations, the biggest risk is tariffs: the orange man can (and did) impose 50% tariffs from China, and all the sudden I face a severe supply-demand imbalance with a lot of contract cancellation and such. How can I hedge such tariff risk from the orange man? (Obviously, the alternative is that I wish we could have elected a more competent leader, but at least 75 million American disagreed with me).
What happens when the people with pitch forks come for your derivatives and call it gambling? They did during the 2008 financial crisis. It sounded pretty much exactly like your take here, one abstraction jump away.
Then after they've come for your derivatives, they come for your banks. Because what is a bank except skimming off the top of the company doing the real business?
Then they come for your company. Because what is a companies except skimming off the top of the workers doing the real business?
And then you're standing in that bread queue wondering how it happened, even if it was all 100% predictable.
Also notice that all those things I gave as examples actually happened. Multiple times.
I mean look at all the oil market manipulation in the Iran war. The pattern was repeated so many times: short oil, announce a ceasefire deal with imminent on Sunday before the markets open, cash out on Monday, rinse and repeat.
The argument is that we get transparency on what's likely to happen. I don't think there's any evidence of this. I've seen any number of very poor predictions coming from Kalshi and Polymarket. I have also seen some clear manipulation.
We should call this what this is: gambling.
Unfortunately they also place a larger financial inventive on influencing the outcome of future events. Or incentivizing corruption within the inner circles of these events. Because the larger financial upside in these transactions is to bet against what the market thinks, and influence the outcome.
This is so fallacious. Putting money behind something doesn't make a prediction of a non-knowable more accurate.
Tarot card readings by a psychic must be more accurate predictor than a tarot card reading by an amateur because professional tarot card readers have a financial incentive to be right, so people continue coming back to them for advice. Getting a tarot card reading therefore makes this basically most accurate predictor!!
I'd be in favor of a prediction market for which which asteroids are likely to collide with something, and when. Though we'll have to shut it down once it becomes feasible that somebody might go up and nudge one.
Here, let me predict a future where someone will die. On the other side, let me pay for a hit on the same person. /s
^It's a bit extreme and exaggerated, but it's like that on purpose to make a point.
Do we want an accurate public prediction of events with national security implications?
Most of the things we actually need to predict (winner of the Superbowl not among them) already have large and liquid financial markets behind them.
A pyramid scheme uses new investor money to pay fake returns to those who have already invested.
A casino provides games to bet on where expected value for the player is negative. A sportsbook balances their book by modifying the odds to remain as neutral as possible and capture the spread (see ‘vig’).
There’s not a whole lot of similarity there.