> And taking on the feds too, that is a gutsy move.
More likely a wasteful move. Federal preemption is well established.
More likely a wasteful move. Federal preemption is well established.
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...
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.
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.
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.