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
runako
> Kalshi is just hoping to be treated like Uber was.
This is not a bad strategy for a company in our asymmetric regulatory environment. Fortunes were made in crypto on exactly this one-way bet.
Go on breaking the law until you get a favorable judge/Congress. Nobody is going to jail (we don't really do that anymore), you might pay a fine. Every once in a while you'll have change the app a little to sort of comply with a judicial order. There's practically no downside to this strategy.
highfrequency
> Go on breaking the law until you get a favorable judge/Congress. Nobody is going to jail (we don't really do that anymore), you might pay a fine.
Binance, FTX, BitMex, Silk Road founders all went to jail - it’s a huge coin flip.
runako
> Binance, FTX, BitMex, Silk Road founders all went to jail
BitMex didn't go to jail, they all got probation/ankle tag, for not running a clean money org (allegedly no KYC, registering US accounts from offshore, etc.). CZ got caught in the US anti-China panic that also saw the TikTok ban pass Congress with nearly 80(!) votes in the Senate. Silk Road: drug trafficking.
FTX is the closest analog, but by all accounts they did not run a clean operation. What I have read of their operation would have been grounds for charging even if they were trading legal securities.
Seems the through line is if your main business is illegal, you need to run it as if it were going to be legalized tomorrow.
laserlight
Sam Bankman Fried wasn't jailed for running FTX. He was jailed for conducting fraud. Silk Road wasn't a registered company at all. It was downright criminal.
aetch
Now they’re getting out of jail with a few donations
treebeard901
Kalshi hired Donald Trump Jr as a strategic advisor with a salary reported to be around $300,000 per year. Recently there was a meeting between him and various State Attorneys General, where the message was back off prediction markets. Not too long after that other areas of the Trump Admin sent a letter basically saying the same thing.
And so the circuit courts coming to very different conclusions from the 9th circuit represents the inherent political corruption involved in the court system.
Circuit splits get resolved at the Supreme Court and I would make a prediction that it isnt a coin flip, probably more of a safe bet.
khriss
IIRC, the Binance founder simply paid Trump off and got a pardon, with Trump himself admitting afterwards that he 'didn't know who the guy was'. So, the assertion that there are no real consequences anymore for 0.1% continues to hold.
grim_io
It was a different time.
kingkawn
offering services illegally is one thing, defrauding investors in Ponzi schemes is different
mixdup
Silk Road was running an online marketplace for heroin and hitmen. That is not the same as Uber pushing the boundaries on what a "taxi" is, and you obviously know that. FTX was a ponzi scheme and that is the one financial crime they will still put you in jail for. It's the exception that proves parent comment's rule
alexpotato
This has been true in the opposite case too.
e.g. make as much money as possible while you have a favorable judge/Congress/President b/c you assume the ability to make money will go away once the next regime is in power.
watwut
I mean, you wrote it as of there was an alternative pf these companies not trying to make as much money as possible.
trompetenaccoun
Fortunes were made long before venture capitalists and governments got involved in (crypto)currencies. Even larger fortunes were prevented by legislation crafted by the banking cartel over many decades, pushed through with the help of their lobbyists in DC.
Existing legislation favors the haves, not the could-haves. And many people go to jail every year for breaking rules that big banks get a slap on the wrist for. Money laundering, terror financing, fraud,... Name a major bank and I'll list you some crimes no one ever spent a day in prison for. But that's fine because they have a license.
vkou
What kind of society do you get when the positive EV play is to always break the law first, litigate later?
brendoelfrendo
If you're in the USA, you can see for yourself by looking out the window. It's not great!
bfdm
A broken one, evidently.
kotaKat
Quite a few people (and countries) subscribe to the “it isn’t a war crime the first time” model.
cyanydeez
Not just breaking the log: use your VC funding to both build your product and buy your politicians. The asymmetry is basically that our politicians are way cheaper than market demand, like they're communists in north korea and just border guards who can get bought off with some contraband.
msandford
Isn't this also more unique since they're trading futures contracts vs whatever a traditional sports bet is? I thought it was kind of a clever end run around the law where taking down their gig would also mean that you have to attack commodities futures contracts as well and that the Congress would be loathe to do that lest they accidentally outlaw the stock market.
When I say "clever" I don't mean"good" I mean "crafty". You acknowledge someone has game without condoning their behavior or extolling it as virtuous.
Congress didn't eliminate the federal prohibition on sports gambling when they created the CFTC. Ergo, it is clear that Congress did not intend for sports gambling transactions to be within the jurisdiction of the CFTC.
The only clever thing they did was putting members of the Trump family on their board.
dzonga
wish more lawyers broke down things simply like you did.
unfortunately - as you pointed out the outcome of the cases being a coin flip at the supreme court is the tragedy in all of this.
ButlerianJihad
> That will be a coin flip
I call $50 on Tails!
echelon_musk
Seems like something there could be a prediction market for on Kalshi.
inigyou
I call $50 on Whonix
mlrtime
I'm selling options on ButlerianJihad losing, expiration in 1 year for $25. Who wants one?
0xbadcafebee
> because Kalshi doesn't want to follow the actual law
Correction: because the federal government doesn't want Kalshi to follow the actual law. CFTC ordered Kalshi to continue operating in NY when NY tried to crack down on it. Donald Trump Jr. is a paid advisor for Kalshi. The US Government's conservative leaders are ignoring states' rights in order to personally profit, using Kalshi as a tool.
> this will end up at SCOTUS, and everything until then just doesn't matter
Unless Congress passes a law so SCOTUS doesn't have to. We can't keep pretending it's normal for SCOTUS to decide everything about our society. If Congress won't do its job, why do we have them?
jfengel
We have them because the Founders thought it was a good idea.
Then they thought it was a good idea to have two houses with different criteria, giving two chances to quash legislation. Plus the veto. Plus the Supreme Court (whose job they left almost completely undefined, so they made up a job description).
So we have them because we can't get rid of them. But they are practically useless. They can usually manage the bare minimum of reauthorizing the thing they said last year. Then they can rename a few post offices, have some grandstanding hearings, and then go home to campaign for reelection.
dmix
That’s the history of separation of powers, the judiciary is the final check in the loop. It doesn’t fully explain why Congress has allowed the expansion of executive power for nearly a century, resulting in more and more major issues being pushed to the Supreme Court.
That’s not to say states have lost power, their reach has also grown exponentially far outpacing even the federal in terms of number of workers and written law.
It’s mostly just Congress has become self satisfied on being negotiators for spending the most money in their own states, while ignoring the minimization of their role in the greater power dynamic.
Everyone makes a big deal about president as the signal but IMO if you take a 10,000-foot view of US history Congress neutering itself is the real long term narrative. Including most major current populist issues like immigration, debt, war, abortion, etc. They are hands off unless it involves new spending.
jfengel
I think it does largely explain it. Congress can't do even necessary things. On the rare occasions they can, they create an executive branch agency and give it the power to write regulations. They know that Congress is neither qualified nor capable of handling it.
Then when the executive takes more power they have little ability to opposite it. Especially since there is a significant Congressional delegation who believes in the Unitary Executive theory, who will interfere with attempts to rein it in.
I believe it is entirely due to the Founders being intent on pitting Congress against itself, while the President is a single person. They initially tried a half-assed version of that by making the runner up Vice President, but that was quickly seen to be useless.
There is a lot more to be said over a quarter millennium, but that is the fundamental design flaw.
dmix
That’s a great point.
Congress largely just generates new federal agencies, where there is now about 400+, and then mixing responsibilities for running them. Combine that the executive order mandate scheme and appointment/independence thing being vaguely defined. So it basically continuously empowers the executive each generation while Congress is scared to respond.
Which is other half in how the two parties perfected building loyalty schemes, where the president or leading opposition candidate can kill off a congressional candidate with their influence and easily stack congress with their people.
I’d personally ban a sitting president or ex president from getting involved in Congress or senate run. Also maybe a similar scheme for the Supreme Court.
fweimer
> It doesn’t fully explain why Congress has allowed the expansion of executive power for nearly a century, resulting in more and more major issues being pushed to the Supreme Court.
It's not just about executive power. In recent times, Congress failed to adjust the written law when societal consensus shifted, and the discrepancy was resolved the courts, and ultimately the Supreme Court. I don't think Congress would pass something like the Civil Rights Act under the current circumstances. This isn't good for a democracy because the political debate that is part of the regular legislative process is lost.
vkou
> It doesn’t fully explain why Congress has allowed the expansion of executive power for nearly a century, resulting in more and more major issues being pushed to the Supreme Court.
It's because the US is a presidential republic with no concept of a non-confidence vote. This makes the sitting head of the party ~impossible to remove, and when government fails to reach consensus, instead of... Having an election, and let the voters decide, power de-facto ends up in the hands of the executive.
reliabilityguy
I am not sure a vote of non-confidence would have helped here — there are only two parties.
skissane
> I am not sure a vote of non-confidence would have helped here — there are only two parties.
But why are there only two parties?
The rest of the Anglosphere–Australia, Canada, Ireland, New Zealand, the UK–have multiparty systems–some are more multiparty than others, but none of them have the hard two-party system that the US has, in which third parties have a very marginal role (not completely marginal – e.g. in a close election, the decisions of New York's Conservative and Working Families parties can make a real difference to the outcome – but certainly at a national level third parties have no real power in the US.)
First-past-the-post is a popular explanation, but it can't by itself explain it, since the UK and Canada use it, yet lack a US-style hard two party system (and with the rise of the Reform party in the UK, the British system is becoming less two-party than it has been in a long time.)
nkrisc
First past the post doesn’t explain historically why we have only two parties, but it explains why we will continue to have only two going forward unless something changes.
jfengel
It explains why you end up with two parties even if you start with more. The two largest will woo minority parties until they get a majority. And minority party members know they will be marginalized unless they are aligned with the majority (or hope to be in the majority some day.)
Changing that will require a radical reconsideration of democracy, like replacing FPtP with... something.
consp
I dont see how the uk system's small parties are not marginalized. The larger parties still claim outright majorities with 35% of the votes or less (last time 172 seat majority with 33.2% of the votes) so they are irellevant.
If I am not mistaken all disruptions to fpp two party systems eventually settle back into them, maybe not the same parties but two nonetheless.
jfengel
The smaller parties are all aligned with one of the two major parties. In a lot of ways they act more like caucuses than separate parties. Like Bernie Sanders being "independent".
That's overstating it, but it's why the largest group always can form a government. They go to the same aligned parties looking for a majority.
0xbadcafebee
Even if first-past-the-post could change, it's not the whole ballgame. To get on a state ballot you need thousands of petition signatures, and those signatures can be invalidated on technicalities brought up by major parties' legal teams. To be covered by the media or be included in a debate you need to poll at a high percentage. You can't get public funding to campaign unless you already had a high percentage of the vote in a previous election. Nobody will donate to you because the third party just detracts from the other two that will give the big donors what they want. And gerrymandering ensures the same people keep getting elected. All those roadblocks are in place because the two major parties put them there to prevent 3rd party challengers. The whole thing is rigged.
Just to show up and get 1% of the vote, you would need a grassroots national movement to elect someone who was wildly popular, who could build a 50-state network of volunteers (including legal, political, financial, community organizing, etc), sponsored by someone with extremely deep pockets that doesn't want anything from established political figures. And you'd still lose.
We have representatives already. The problem is we never hold their feet to the fire. We keep voting for the same useless bastards, and we don't vote them out when they do nothing. Half the country doesn't vote. That's our own responsibility we're shirking. Rather than get a new party, we need to get off our collective asses, and use the existing power we have to force the parties to do their jobs.
fooey
the lesson congress learned from the Hillary Clinton coronation getting derailed by Obama was to absolutely never ever vote on anything important
reliabilityguy
Can you elaborate what you mean?
mlrtime
In 2002, Hillary Clinton voted for the Iraq War. In 2008 Obama used that fact successfully to [help] win the Democratic nomination and went on to beat McCain.
9dev
As Donald Trump and the Republicans have so aptly proven, all checks and balances depend on an elaborate system of conventions, manners and personal honor, and a general spirit of compliance. As soon as the electorate votes for a party and administration choosing to simply ignore all that, the system folds entirely.
That is also the core problem for reestablishing trust with the rest of the world: Even if a Democrat or just a sane Republican wins in 28 and tries to revert many of the destructive policies the current administration enacted, there is now solid evidence the much-hailed system of checks and balances doesn’t work as advertised. And that means there is not really a legitimate argument to trust the US as much as countries and businesses did, which calls a lot of things into question—the bond market, the petrodollar, investments in the USA, dependency on American services…
throw0101a
> We have them because the Founders thought it was a good idea.
The US Founders also did not have political parties, and the tribal/clan thinking that goes along with them.
Alpha3031
Well, one should also remember that they thought protecting the opulent minority was so important that an entire house ought to represent them. Secure the permeant interests of the country and all that.
Not that the other house isn't also tilted that way, but it seems to be that they, and the appointments approved by them, are functioning exactly as was intended (as shown by the supreme court suddenly caring about executive overreach when it came to money). Who knows whether they would care about the social issues affecting the poors nowadays, but they certainly didn't care to let the people be in charge without a veto from that opulent minority.
9dev
They also thought owning slaves was a good idea. Perhaps we shouldn’t let men dead for centuries dictate how to run the country anymore?
DannyBee
Thankfully, the CFTC can't actually order Kalshi to continue operating in NY despite being in violation of NY law. They have no authority to override any judge's order/etc, and at least so far, have not pretended they do.
As for me, i've never pretended it's either normal or desired for the courts to make policy, whether congress is dysfunctional or not.
Among other things.
My comment was basically pointing out that the current supreme court seems perfectly willing to throw out decades of settled law on an ideological whim, and actually, for that matter, happily interpret very clear congressional statutes in very odd ways.
So your comment there is mistargeted, at least as applied to me.
tmp10423288442
> the current supreme court seems perfectly willing to throw out decades of settled law on an ideological whim, and actually, for that matter, happily interpret very clear congressional statutes in very odd ways
Fortunately or unfortunately, the Supreme Court has always been willing to do that. This court has been overruling decisions of the Warren Court, just as the Warren Court overruled decisions from the Lochner Era.
watwut
Overruling bad decisions is not a problem. Following is a problem:
> decades of settled law on an ideological whim, and actually, for that matter, happily interpret very clear congressional statutes in very odd ways
This court is not like the previos one. Things are not the same
bjt
> We can't keep pretending it's normal for SCOTUS to decide everything about our society.
That's not what this is. As the 9th Circuit points out, states already have quite extensive laws about gambling. We don't need Congress to step in to either reinforce or displace them. The courts are doing their job by ruling on existing laws.
gamblor956
Unless Congress passes a law so SCOTUS doesn't have to.
Congress doesn't need to pass a new law. Federal gambling laws were not removed from the books when Congress created the CFTC because they did not intend for gambling transactions to be regulated by the CFTC. (Federal gambling laws were not struck down until 2018, by SCOTUS, on First Amendment grounds. Yes, the decision was written by one of the justices known to have accepted gifts from companies doing business before the Court.)
fooey
absolutely nothing in going to happen in the US congress until 2029
we're essentially one year of three into one of the least effective lame duck legislative bodies we'll ever see
mullingitover
> “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.
echelon
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 a personal liberty perspective, but the companies that facilitate and profit need to pay 40-50% of their gross revenue to the government. That's comparable to tobacco.
Companies also need to be restricted in how they are able to advertise their vices. Never to children, and never targeted to at-risk personality types.
They also need to be tightly regulated and kept from using dark patterns and addictive gotcha mechanics to cause even greater harm to those most at risk.
jareklupinski
> 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
combobyte
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.
ryandrake
This is the correct reply to the constant "but whatabout" replies, that inevitably come up whenever you suggest regulation. "You've regulated bad thing X, but then they'll do Y!" So regulate Y! It's not like legislators only get one crack at a law. We should elect a government willing to move fast and iterate when loopholes are uncovered.
inigyou
The thing is that US Congress can't make laws. It just can't. It's nonfunctional. When it does that's the rare exception, and it better be perfect the first time because you won't get so lucky twice.
Cloudflare block page - I'm a bot. What does it say?
gopher_space
I mean if you're arguing an edge case you've already accepted the central point, so it's not like a response needs to be made. We handle edge cases.
khriss
> Those second-order effects are easy to mitigate with sensible public policy.
Regrettably, sensible public policy seems to be in remarkably short supply these days.
jareklupinski
after the first fifty years? :)
biological organisms develop addiction much faster than political processes
esseph
> When was the last time you saw an ad for cigarettes?
Today at the gas station on the outside of the pump and the store door.
dghlsakjg
I was at a gas station today that sells tobacco. No ads. Its because even displaying tobacco products, let alone advertising them, is not allowed in that jurisdiction.
I'll bet you didn't see any cartoon camels or doctors recomending a brand though, because even where tobacco ads are legal, many tobacco ads are no longer legal.
Whether you see ads, and what kind of ads you see is highly regulated. That's the whole point,
esseph
> I was at a gas station today that sells tobacco. No ads. Its because even displaying tobacco products, let alone advertising them, is not allowed.
We clearly don't live in the same states.
dghlsakjg
Sorry for the ninja edit about jurisdictions.
I live in a different country since we don't have states here.
Hikikomori
Do you watch movies?
tofuahdude
Aren't worth what? The tax? Or the vice being legal in the first place?
jareklupinski
aren't worth the tax: no matter how high you set the tax, it won't offset the amount you have to spend on rehabilitating the effects of the vice
legality itself never stopped a vice from being indulged :) it's the cost / benefit that brings back repeat customers and encourages addictive behaviors
dakolli
You can't tax revenue in sports gambling markets, it actually just leads to predatory gambling products with massive vig/house edge. This was attempted in Tennessee. Margins are extermely low sports betting, like 4.5%. Its actually a loss leader typically. So for casinos that only have this type of wagering it taxes like this aren't going to work. A casino might turn over 50 billion yearly but only have a 2.5% edge in sports betting but you're proposing we tax them on the 50 billion. It doesnt work.
It will either push them out of business, or they'll find a way to screw the player to increase margin through even more deceptive products.
If the legal entity can't operate because of a tax on revenue than illegal offshore entities will gladly take their place and do.
The only solution really is sharia law, a complete ban and harsh punsihments for all operators and customers. I say this ironically but it actually is really the only solution, and even this doesnt work entirely.
matthewdgreen
Sports betting was, if not prohibited, then highly-proscribed for most of my life. You could do it in a few places like OTB, go to Vegas, or deal with an illegal bookie. People still gambled, but this made the problem orders of magnitude smaller than it is today. We did not need Sharia law or the guillotine, just an existing system of laws that were generally highly workable. It is not helpful to pretend like we need wild solutions just to achieve results we’ve already achieved and maintained for decades.
dakolli
I really dont think the problem has gotten worse, its just more visible. The previous status quo didnt work either, you just didnt hear as much about it because there weren't commercials.
In all reality, the NASDAQ does the entire yearly turnover Klashi and Polymarket combined in a few minutes. It hasnt become as big of a problem as people make it out, but its still a problem.
But there's no going back to the status quo with 1990s methods of enforcement. Everyone knows how to use crypto and VPNs, you'd just be pushing people into shady offshore.
kijashdkujdfhas
> Everyone knows how to use crypto and VPNs,
Not everyone who has placed a bet on Kalshi or Polymarket necessarily knows how to use these tools.
> you'd just be pushing people into shady offshore.
Hurdles help. Not everyone will know how to jump every hurdle. Not everyone will be willing to put forth the effort. Will some people? Sure. But hurdles do cut down on the overall participation.
inigyou
Why do you assume the tax is on bets and not on profits
dakolli
Im replying to a comment that says it should be taxed on revenue.
quickthrowman
The revenue of a sports book is the spread captured (vig) along with any losses/gains from an imbalanced book. The wagers are not counted as revenue. DKNG did $6B in revenue in 2025, if wagers were included that number would be a lot higher.
That being said I still don’t think taxing on revenue is a good idea.
mlrtime
People here have said even crazier ideas on HFT trading tax or wealth tax. People have lots of crazy ideas about taxation that clearly doesn't work. It's hard to tell if they don't get it or don't care because they actually just want it banned outright.
Few here would be a good politician or law maker.
inigyou
Or maybe you're just assuming the stupidest possible versions of those ideas
karlgkk
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.
consensus1
Which we called the "stock market"
xoa
No, the stock market is not gambling (or at least hasn't been, need not, and should not be). The stock market is a positive sum game, linked to the growth of the economy as a whole. Humanity is very, very far from the maximum possible utilization (and maximum efficiency) of matter and energy in this solar system or even this world. What decisions we make matters a lot in how well/how fast/whether we continue to get richer, so we've tried however ineptly and haltingly to make systems that reward short and long term gains balanced against current use priorities. And have failed plenty, and may yet fail completely. But it's perfectly possible for everyone to win, for the whole world to get "richer" (defined as being better able to meet human goals & desires within a given mass/energy budget or have more or both). Investments can yield >1x total returns. And that has indeed been the case, that's the story of modern civilization.
Gambling in contrast is strictly zero sum at best and always negative sum in reality. A group of people puts in 1x capital, the house takes a cut of that, and then the <1x gets unevenly redistributed and that's it. Nothing is generated, the collective set of people is strictly worse off after the gamble, with a few making gains off the backs of loss distributed amongst everyone else. All while hacking dopamine reward centers that didn't evolve for that.
It appears to be the case that we can't perfectly stop 100% of all IRL gambling without a cost that exceeds the benefit. That's life. But that doesn't mean we shouldn't be picking as much low hanging fruit as possible, same as with other negative sum brain hacks.
mullingitover
> or at least hasn't been
The stock market was so gambling that we had 'bucket shops' where people would just buy and sell fake stocks that tracked real stock prices.
Now we have public companies directly selling shares with no voting rights and no plans to ever pay dividends, which is the same thing.
ryandrake
By a strict definition of gambling, the stock market is gambling: It's a monetary wager placed on an unknown future event. Just because it (often) is positive sum doesn't mean it isn't an unknown that people are betting money on.
xoa
>By a strict definition of gambling, the stock market is gambling: It's a monetary wager placed on an unknown future event.
No, that is not a strict definition of gambling, that is your own loose, personal and casual definition. The strict definition of the gambling in question under Arizona law (the subject of this article) is I believe partly under 13-3301 [0] and has a number of criteria that clearly differentiate it from investment (whether it be stock, loan by a bank or any other entity/person, or whatever else). Other polities will have their own flavors, but all of them are aimed at a net negative, destructive social activity. That's the whole point of regulating it, it's not some metaphysical philosophy thing about life having uncertainty it's about long experienced concrete harm. Trying to argue that buying shares in a broad index fund is a "wager that a meteor will not hit the Earth" is uninteresting.
>Just because it (often) is positive sum doesn't mean it isn't an unknown that people are betting money on.
It does actually! Positive sum changes everything in terms of collective incentives, strategies available and how investors can hedge risk. You may not choose to make use of all the tools available, but that doesn't make investment the equivalent of gambling. Part of the whole point of markets is to manage changing risk and information discovery (including dead ends) such that we still continue to grow overall.
Pointing that out makes as much sense as "so you're against drugs? Did you know Tylenol is a drug? Ha checkmate!"
inigyou
Great example, because Tylenol is more dangerous than nearly every illegal drug.
gamblor956
Today I learned on the Internet that Tylenol is more dangerous than meth, cocaine, or fentanyl.
Wait, no I didn't. That's absurd. Tylenol can cause long term health issues if used in excess (or death, for extreme overdoses), but most illegal drugs are illegal because they can cause immediate death even at normal usage amounts.
inigyou
Meth used to be available over the counter in pharmacies in the US.
No drug I'm aware of causes immediate death in normal usage, except perhaps those used for lethal injection. Would you like to elaborate on that? Tylenol, on the other hand, causes an unpreventable (no antidote) slow drawn out death over about a week, where your body will be slowly decaying and you have time to say goodbye to all your loved ones, if you take a few times the normal dose by mistake
AngryData
You would have had a better point if you didn't include cocaine which is only really dangerous for people with severe heart problems or by using it in combination with depressive drugs that it temporarily suppresses.
If cocaine was really a problem then C-suites and politicians would be regularly dieing.
mlrtime
Now do H20, very harmful at high amounts.
hoppyhoppy2
I'm not chemistry-minded enough to know what H20 would be, but I suspect you meant H2O. ("O" as in oxygen, not "0" as in zero.) (and of course the "2" would normally be subscript, but this is HN)
inigyou
For those who downvote: it's true. Look it up.
tsimionescu
It's not true, as "dangerous" doesn't mean what you seem to think it means. Just because Tylenol (acetaminophen) is highly toxic in actually quite small doses doesn't make it as dangerous as vicodin or morphine or heroin or meth or fentanyl.
A drug is dangerous when it is toxic at an easily obtainable dose AND there is a clear incentive for people to consume it in that dose, such as addiction and tolerance. While acetaminophen is unusually toxic at doses only slightly higher than regular treatment doses, there is actually very little that compels people to use those doses, and acetaminophen toxicity is not an epidemic-level health problem the way many other drugs have become.
everforward
Acetaminophen overdose does actually have a surprisingly high rate of occurrence. A lot of people don’t realize how narrow the therapeutic band is.
Doubling your meds on a bad pain day can put you way beyond the safe limits. People think it’s safe because basically every other OTC has a huge therapeutic band, and double dosing is not recommended but not really dangerous.
CDC estimates it at 56,000 ER visits a year, 26,000 hospitalizations, 458 deaths, about a hundred unintentional deaths per year. As a point of reference, it’s about 3 accidental overdose deaths per child that dies from being locked in a hot car.
inigyou
This sounds like a rationalisation to me. People take Tylenol for pain. If they're still in pain, they take more of it. Tylenol doesn't mitigate all types of pain so people might think they need more. This happens, and then they die. It happens surprisingly infrequently considering how abnormally dangerous the drug is, but it still happens.
tsimionescu
Tylenol only works for relatively low levels of pain, which tends to be relatively short term. So abuse is not very common, and even with chronic pain, Tylenol overdosing kills quite quickly, it doesn't have time to become a habit that takes down entire families together with the chronic pain sufferer.
Either way, we don't have to assume, we can directly check the numbers. Per another commenter, Tylenol kills about 458 people in the USA every year. In contrast, death from overdose on illegal stimulants was estimated at ~33.000 people in the USA.
Now, is it fair to say that Tylenol is more dangerous than marijuana? Of course. But to say it's more dangerous than most illegal drugs? Obviously not.
inigyou
I wonder what the death rate on those other stimulants would be if they were issued the same way, in regulated pharmacy stores.
I know that a lot of illegal drug overdoses are caused by people who thought they were taking a normal dose but got the wrong substance, wrong amount or wrong concentration from their dealer - who in many cases also didn't know about the discrepancy because of unreliable supply chains and difficulty of testing, both caused by illegality.
gruez
Again, that's missing the point of drug regulation. There's plenty of substances even more dangerous than Tylenol, but aren't banned. "Drugs" are banned due to a combination of (perceived) harm to user/society, potential for abuse, as well as toxicity. That's why there's plenty of substances more toxic than Tylenol, but aren't banned.
inigyou
But that's missing the point of the discussion. Yes things are banned based on perceived harm instead of actual danger, that's the point of the discussion.
consensus1
I was joking (mostly). The stock market absolutely is positive sum, but at the same time things like 2x levered short VIX ETF's exist...
xoa
I mean sure, people can find ways to use all sorts of events and activities for gambling, but that doesn't mean the events/activities themselves are. And the sentiment you expressed joking has gotten repeated with (afaict) total seriousness in these threads with some regularity (insurance is another one that people incorrectly bring up trying to defend gambling). So I think it's pretty important to differentiate between everything, and to help pass on some of the history as humans have grappled with this in the past. Insurance for example has the concept of requiring an "insurable interest" to help avoid negative incentives and gambling. You can insure your own house against burning down, but you can't take out a policy against some random stranger's house.
consensus1
Yeah, I hear you. The "stock market is rigged, insurance is a scam" vibe is strong here. HN has really turned into a sounding board for bitter people who think the whole world is out to get them.
usefulcat
The problem with this comparison is that it only really serves to water down the very real harms of actual gambling.
Unlike sports gambling or casinos, the stock market actually does have some legitimate utility, as compared to being (at best) pure entertainment.
inigyou
At what ratio does it become a problem? 0.01% actual utility and 99.99% gambling, or?
everforward
The utility is always the same. The stock market provides price discovery, which drives efficient resource allocation (in theory).
Theoretically, more gamblers should mean better price discovery because the payouts for correctly taking the opposing side of the trade are higher.
The market solution would be that the gambling will eventually solve itself. They’ll either learn enough to be trading on knowledge rather than vibes, fueling price discovery, or they’ll exit the market when they’ve lost too much or everything.
My sticking point is that a lot of brokers offer leverage to people they really shouldn’t. I could have sworn you had to be a qualified investor to get leverage, but if that isn’t law it should be. Show the brokerage your certification, or a pile of cash large enough to convince them you can afford to lose the whole thing.
inigyou
I don't know if "theoretically" is good enough here. The theory hasn't really been tested or proven. It's more of a hypothesis, and an ideologically driven one at that.
Cyclone_
You can always just ban things. The families of those who go into financial ruin from gambling would prefer this.
pibaker
I don't think you can equate Kalshi style "prediction market" with gambling in Vegas. The worst thing that can happen in Vegas is you the gambler go bankrupt. In the meantime we already have reports of war intelligence in Ukraine being distorted so someone who betted on frontline movements can pocket some cash. Losing a war because some rich degenerate is trying to bet his way towards a second Ferrari is less unlikely than you imagined.
dghlsakjg
The reports that were altered were public reports at the ISW from open reporting, not government intelligence. If you lose a war because you based your tactics and strategy off of media reports instead of your own intel, you weren't going to win that war anyway.
That said, I recognize the broader point. Betting on everything, especially things that betters can directly influence is incredibly dangerous.
inigyou
Someone blew a hair dryer at a weather station at Paris CdG airport to win a bet.
quickthrowman
Farmers in the US were tampering with official USDA rain gauges used to quantify precipitation for crop insurance payouts, all you need to encourage this sort of behavior is a financial incentive and lax security.
Your argument of course sounds nice and fails under your inability to define "gambling."
I view favored house-odds, on arbitrary games or not, as unethical and predatory. This is the classic casino slot machine and related. However, Poker doesn't have house odds, it is a fair game.
Move one level up: prediction markets don't have house-odds if implemented plainly. On non-game events, they also have a positive externality, which already contradicts your claim: prediction markets predict quite well.
Yet another level up: investing in the stock market. The same authentic gambler who burns money into a slot machine can play the stock market to similarly disastrous ends. But if you define this as gambling and want to outlaw or limit it to 'professionals' then you bar people from capital markets which is absurd.
tsimionescu
Prediction markets very often have house odds, even if the market runner is not the house. When you bet on events, the people who can influence those events and are also betting alongside you are the house. They know or can even decide later what the outcome will be, and yet you are betting against them.
This is often called "insider trading" instead of "house odds", but it is ultimately the same thing, the same moral hazard. And note that this is illegal, both in the stock market and in commodities trading - though enforcement varies, and is not very easy anyway.
I'd also note that there are significant problems with random reward games / gambling even when there is no house advantage. Gambling addiction is a real problem that destroys some people's lives, just like alcoholism. And people can become addicted and lose their houses by playing poker just as much as they can by betting on roulette.
lern_too_spel
Why should it be comparable to tobacco? It should be derived from first principles. Figure out the external cost to society and tax it enough to pay for those costs after money distribution overheads. If there is no tax structure where the revenues exceed the costs, ban it.
The difficulty with taxing prediction markets is that encouraging gambling on some events incentivizes gamblers to try to influence those events in a way contrary to how people would want to influence them in the absence of gambling, which typically means gamblers are incentivized to influence events in a way that will increase societal harms. For some events, resolving one way or the other is inconsequential, but this is not true for many of the events I see people gambling on in prediction markets.
charcircuit
The government never needs to tax things. If you think it is negative to society then it can be banned so that money can be spent elsewhere.
EA-3167
The law is slow by design, it's deliberative, it's multi-staged, it's escalatory and obsessed with consulting multiple jurists. That can be extremely frustrating until you start looking into how the country would look if individual judges were able to fast-track the whole system. Naturally we'd celebrate the positive outcomes, but the bad ruling would immediately go into effect rather than facing injunction, review, etc.
These laws have profound effects and it takes people time to learn about what they pertain to, especially new technology or new ways of using it. It's good to have periods of feedback between the public, the courts, the legislature and the executive branch. The same things that slow down what we most want to happen quickly also slow down the things we desperately want to avoid.
"If only the law moved as quickly as an individual" is great until you get a guy like Trump in power.
pennomi
The law being slow is exactly why a guy like Trump in power is dealing so much damage. Nearly everything he’s done has been illegal, but the decisions often take so long that they have no effect.
meowkit
Was great when the world ran on horses and whale blubber.
The legal system tells itself this noble story of measured action without realizing it actually became the bad guy many decades ago.
My brief little opinion here is half informed from dating a lawyer for a few years.
hungryhobbit
The appeals court found sports betting isn’t shielded by the federal law used to block Kris Mayes’ prosecution.
dcrazy
Hope dang comes in with a headline rewrite
Detrytus
and why would he do that? It is an actual title of the linked article.
crossroadsguy
(Not American)
What does 9th circuit or some circuit court mean?
It some name of a specific court, just not the place name?
Or is it special kind of court and “9” is some sort of level? Importance or hierarchy related? Escalation level? (Assuming your SC eventually is also at the top like in India)
tsimionescu
As I understand it, each state has a certain federal appeals court that it belongs to - and these federal appeals courts are numbered. The 9th circuit is the highest appeals court responsible for all federal suits coming from Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington. They are higher than any other court in those states in matters of federal law (state law is separate), with only the (federal) Supreme Court being above them - but the Supreme Court is not a regular court, they have discretion on what suits to hear (whereas the appeals courts have to hear any suit that gets lawfully appealed in their jurisdiction).
Other appeals courts have jurisdiction over other areas of the country - and there is no question of level between them, as they have completely separate jurisdictions.
It's important also that every circuit court is beholden to its own precedent, and every court below them is beholden to the precedent set by their appeals court. But courts in other areas of the country are not - it's perfectly legal (though not extremely common) for one appeals court to decide one way and another to decide a different way on the same matter of Federal law. Unless the SC intervenes, the appeals court of your particular jurisdiction is the ultimate authority on how that federal law is to be interpreted in your jurisdiction.
So, the fact that the 9th circuit decided that Kalshi is a gambling site and not a commodity futures trading platform means that they have to be treated this way by all federal and state agencies in California, Arizona, etc; but they could still be recognized as falling under CFTC rules in Texas or New York, as the 9th circuit decision is not applicable in those jurisdictions.
thoughtpeddler
From my hazy recollection from law school, the US appeals courts are called "circuits" because back in the day, they weren't actual buildings but rather judges that would go around town-to-town within their jurisdiction in a horse-drawn carriage 'in a circuit' (that corresponded to a certain geographic area). The name just stuck even after they were permanently enshrined into physical structures (each corresponding to a given region).
mayneack
9th is a region (includes California) circuit is a level (appeals court right below Supreme)
apples_oranges
I see a lot of questions here that can be googled or asked with AI chat. Good question, but I also think, why didn’t that person just find out themselves? It’s so easy..
crossroadsguy
I think I could have done that. Just like you and I could have received this news on Twitter or on Google News. Maybe Reddit? Or we could have asked an AI chat/agent, "Give me news for today." But here we are, aren't we?
And I learned an interesting tidbit from one of the commenters here.
jubilanti
This person isn't actually asking a question, they're performing ignorance as a protest to HN's U.S centricness.
lokar
I wonder what this means for cases under loss recovery acts in states that have them.
eahm
All good and cool when they do it and make money, like the lotteries, but when normal people do it nonono, can't happen.
That said, I've never touched Kalshi or that other one or the lottery. It's all a scam anyway.
morkalork
Rem when mafia bookies running sports betting was a subplot on The Soprano's? It wasn't that long ago.
SoftTalker
Well they are still doing it.
adzm
People seem to be blissfully unaware that illegal and underground gambling is still going very strong.
vkou
It's easier to be blissfully unaware when the illegal books don't bombard every fucking screen and surface with ads.
gregjw
how does anyone regard these things as innovation
BobbyTables2
Looks like Kalshi lost its bet…
johnnyApplePRNG
regulated entities mad at unregulated entities, nothing to see here, yawn
anigbrowl
Actually exactly the reverse
8note
as an argument for sports betting as a market, i remember when the wrong team won the world series, and hadnt setup their correct merch and so on for online sales, and it was a disaster trying to get all the right stuff together to minimize fraud and abuse.
if an online sales provider could hedge against the risk of that win, the gamble would help pay for all the chaos as a result
steveBK123
Lots of bespoke insurance already exists.
Lloyds will insure your rocket cargo or even provide terrorist strikes.
Doesn’t mean we need people wagering at kalshi on “number of terrorism fatalities in London before end of 2025”.
ketzu
> Doesn’t mean we need people wagering at kalshi on “number of terrorism fatalities in London before end of 2025”.
Reminds me of something from the last decade, but I am not sure anymore if it was a discussion or a desceiption: how to structure a "murder for hire" platform to give it plausible deniability/legality by turning it into bets.
"I bet $100.000 @ketzu lives to the end of the year" can be read as life insurance, tasteless betting, or as a challenge to someone betting against it. (which is why here you need a legitimate interest to buy life insurance on someone)
Domenic_S
> or even provide terrorist strikes.
I'm sorry, Lloyd's will _what_??
steveBK123
good point, I missed "insurance against"
delichon
> 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 professionals let alone to the average citizen does not give proper notification of what the law is to the people subject to it.
mandevil
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.
delichon
Declaring the law void for vagueness would not favor Kalshi. It would undercut the federal preemption that Kalshi is advocating for.
jmalicki
Since when has vagueness been considered a bad thing for statutes? It's the foundation of the US (and anglo) legal system and why courts exist, to fill in. And vague statutes that can be interpreted by courts has long been preferred to precise legislated meaning that you seem to prefer.
You could live in Germany or France if you prefer a legal system more ruled by clear statute?
delichon
If vagueness isn't a problem then we can simplify the law by replacing it all with one sentence: Let there be justice.
jmalicki
The idea is to provide overarching guidance, but when there is devil in the details, leave that up to courts to consider when there is a real actual issue at play, rather than legislators in the ivory tower theorizing about how things might play out.
The statute gives the general intent, but with an understanding that until the shit hits the fan in an actual court case, noone will have truly considered the detailed ramifications, so leave some intentional ambiguity there for the courts to resolve on real, actual, grounded cases rather than theorizing.
And if the legislature disagrees with a courts opinion about the ambiguity it left, it is very free to clarify in statute, which will override the court! (Unless the issue is constitutional, in which case the legislature is very free to draft a constitutional amendment!)
jubilanti
I love it when programmers try to play lawyer. Law is not code.
jmalicki
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.
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
This is not a bad strategy for a company in our asymmetric regulatory environment. Fortunes were made in crypto on exactly this one-way bet.
Go on breaking the law until you get a favorable judge/Congress. Nobody is going to jail (we don't really do that anymore), you might pay a fine. Every once in a while you'll have change the app a little to sort of comply with a judicial order. There's practically no downside to this strategy.
Binance, FTX, BitMex, Silk Road founders all went to jail - it’s a huge coin flip.
BitMex didn't go to jail, they all got probation/ankle tag, for not running a clean money org (allegedly no KYC, registering US accounts from offshore, etc.). CZ got caught in the US anti-China panic that also saw the TikTok ban pass Congress with nearly 80(!) votes in the Senate. Silk Road: drug trafficking.
FTX is the closest analog, but by all accounts they did not run a clean operation. What I have read of their operation would have been grounds for charging even if they were trading legal securities.
Seems the through line is if your main business is illegal, you need to run it as if it were going to be legalized tomorrow.
And so the circuit courts coming to very different conclusions from the 9th circuit represents the inherent political corruption involved in the court system.
Circuit splits get resolved at the Supreme Court and I would make a prediction that it isnt a coin flip, probably more of a safe bet.
e.g. make as much money as possible while you have a favorable judge/Congress/President b/c you assume the ability to make money will go away once the next regime is in power.
Existing legislation favors the haves, not the could-haves. And many people go to jail every year for breaking rules that big banks get a slap on the wrist for. Money laundering, terror financing, fraud,... Name a major bank and I'll list you some crimes no one ever spent a day in prison for. But that's fine because they have a license.
When I say "clever" I don't mean"good" I mean "crafty". You acknowledge someone has game without condoning their behavior or extolling it as virtuous.
Congress didn't eliminate the federal prohibition on sports gambling when they created the CFTC. Ergo, it is clear that Congress did not intend for sports gambling transactions to be within the jurisdiction of the CFTC.
The only clever thing they did was putting members of the Trump family on their board.
unfortunately - as you pointed out the outcome of the cases being a coin flip at the supreme court is the tragedy in all of this.
I call $50 on Tails!
Correction: because the federal government doesn't want Kalshi to follow the actual law. CFTC ordered Kalshi to continue operating in NY when NY tried to crack down on it. Donald Trump Jr. is a paid advisor for Kalshi. The US Government's conservative leaders are ignoring states' rights in order to personally profit, using Kalshi as a tool.
> this will end up at SCOTUS, and everything until then just doesn't matter
Unless Congress passes a law so SCOTUS doesn't have to. We can't keep pretending it's normal for SCOTUS to decide everything about our society. If Congress won't do its job, why do we have them?
Then they thought it was a good idea to have two houses with different criteria, giving two chances to quash legislation. Plus the veto. Plus the Supreme Court (whose job they left almost completely undefined, so they made up a job description).
So we have them because we can't get rid of them. But they are practically useless. They can usually manage the bare minimum of reauthorizing the thing they said last year. Then they can rename a few post offices, have some grandstanding hearings, and then go home to campaign for reelection.
That’s not to say states have lost power, their reach has also grown exponentially far outpacing even the federal in terms of number of workers and written law.
It’s mostly just Congress has become self satisfied on being negotiators for spending the most money in their own states, while ignoring the minimization of their role in the greater power dynamic.
Everyone makes a big deal about president as the signal but IMO if you take a 10,000-foot view of US history Congress neutering itself is the real long term narrative. Including most major current populist issues like immigration, debt, war, abortion, etc. They are hands off unless it involves new spending.
Then when the executive takes more power they have little ability to opposite it. Especially since there is a significant Congressional delegation who believes in the Unitary Executive theory, who will interfere with attempts to rein it in.
I believe it is entirely due to the Founders being intent on pitting Congress against itself, while the President is a single person. They initially tried a half-assed version of that by making the runner up Vice President, but that was quickly seen to be useless.
There is a lot more to be said over a quarter millennium, but that is the fundamental design flaw.
Congress largely just generates new federal agencies, where there is now about 400+, and then mixing responsibilities for running them. Combine that the executive order mandate scheme and appointment/independence thing being vaguely defined. So it basically continuously empowers the executive each generation while Congress is scared to respond.
Which is other half in how the two parties perfected building loyalty schemes, where the president or leading opposition candidate can kill off a congressional candidate with their influence and easily stack congress with their people.
I’d personally ban a sitting president or ex president from getting involved in Congress or senate run. Also maybe a similar scheme for the Supreme Court.
It's not just about executive power. In recent times, Congress failed to adjust the written law when societal consensus shifted, and the discrepancy was resolved the courts, and ultimately the Supreme Court. I don't think Congress would pass something like the Civil Rights Act under the current circumstances. This isn't good for a democracy because the political debate that is part of the regular legislative process is lost.
It's because the US is a presidential republic with no concept of a non-confidence vote. This makes the sitting head of the party ~impossible to remove, and when government fails to reach consensus, instead of... Having an election, and let the voters decide, power de-facto ends up in the hands of the executive.
But why are there only two parties?
The rest of the Anglosphere–Australia, Canada, Ireland, New Zealand, the UK–have multiparty systems–some are more multiparty than others, but none of them have the hard two-party system that the US has, in which third parties have a very marginal role (not completely marginal – e.g. in a close election, the decisions of New York's Conservative and Working Families parties can make a real difference to the outcome – but certainly at a national level third parties have no real power in the US.)
First-past-the-post is a popular explanation, but it can't by itself explain it, since the UK and Canada use it, yet lack a US-style hard two party system (and with the rise of the Reform party in the UK, the British system is becoming less two-party than it has been in a long time.)
Changing that will require a radical reconsideration of democracy, like replacing FPtP with... something.
If I am not mistaken all disruptions to fpp two party systems eventually settle back into them, maybe not the same parties but two nonetheless.
That's overstating it, but it's why the largest group always can form a government. They go to the same aligned parties looking for a majority.
Just to show up and get 1% of the vote, you would need a grassroots national movement to elect someone who was wildly popular, who could build a 50-state network of volunteers (including legal, political, financial, community organizing, etc), sponsored by someone with extremely deep pockets that doesn't want anything from established political figures. And you'd still lose.
We have representatives already. The problem is we never hold their feet to the fire. We keep voting for the same useless bastards, and we don't vote them out when they do nothing. Half the country doesn't vote. That's our own responsibility we're shirking. Rather than get a new party, we need to get off our collective asses, and use the existing power we have to force the parties to do their jobs.
That is also the core problem for reestablishing trust with the rest of the world: Even if a Democrat or just a sane Republican wins in 28 and tries to revert many of the destructive policies the current administration enacted, there is now solid evidence the much-hailed system of checks and balances doesn’t work as advertised. And that means there is not really a legitimate argument to trust the US as much as countries and businesses did, which calls a lot of things into question—the bond market, the petrodollar, investments in the USA, dependency on American services…
The US Founders also did not have political parties, and the tribal/clan thinking that goes along with them.
Not that the other house isn't also tilted that way, but it seems to be that they, and the appointments approved by them, are functioning exactly as was intended (as shown by the supreme court suddenly caring about executive overreach when it came to money). Who knows whether they would care about the social issues affecting the poors nowadays, but they certainly didn't care to let the people be in charge without a veto from that opulent minority.
As for me, i've never pretended it's either normal or desired for the courts to make policy, whether congress is dysfunctional or not. Among other things. My comment was basically pointing out that the current supreme court seems perfectly willing to throw out decades of settled law on an ideological whim, and actually, for that matter, happily interpret very clear congressional statutes in very odd ways.
So your comment there is mistargeted, at least as applied to me.
Fortunately or unfortunately, the Supreme Court has always been willing to do that. This court has been overruling decisions of the Warren Court, just as the Warren Court overruled decisions from the Lochner Era.
> decades of settled law on an ideological whim, and actually, for that matter, happily interpret very clear congressional statutes in very odd ways
This court is not like the previos one. Things are not the same
That's not what this is. As the 9th Circuit points out, states already have quite extensive laws about gambling. We don't need Congress to step in to either reinforce or displace them. The courts are doing their job by ruling on existing laws.
Congress doesn't need to pass a new law. Federal gambling laws were not removed from the books when Congress created the CFTC because they did not intend for gambling transactions to be regulated by the CFTC. (Federal gambling laws were not struck down until 2018, by SCOTUS, on First Amendment grounds. Yes, the decision was written by one of the justices known to have accepted gifts from companies doing business before the Court.)
we're essentially one year of three into one of the least effective lame duck legislative bodies we'll ever see
Incredible that it's taken this long to arrive at the obvious.
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 a personal liberty perspective, but the companies that facilitate and profit need to pay 40-50% of their gross revenue to the government. That's comparable to tobacco.
Companies also need to be restricted in how they are able to advertise their vices. Never to children, and never targeted to at-risk personality types.
They also need to be tightly regulated and kept from using dark patterns and addictive gotcha mechanics to cause even greater harm to those most at risk.
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
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.
Seems like they can, or you mean they can't 'make laws' that you personally care about?
100 years ago, the 69th congress passed over 1500 laws, plus hundreds of continuing resolutions, treaties, etc https://www.loc.gov/collections/united-states-statutes-at-la...
Regrettably, sensible public policy seems to be in remarkably short supply these days.
biological organisms develop addiction much faster than political processes
Today at the gas station on the outside of the pump and the store door.
I'll bet you didn't see any cartoon camels or doctors recomending a brand though, because even where tobacco ads are legal, many tobacco ads are no longer legal.
Whether you see ads, and what kind of ads you see is highly regulated. That's the whole point,
We clearly don't live in the same states.
I live in a different country since we don't have states here.
legality itself never stopped a vice from being indulged :) it's the cost / benefit that brings back repeat customers and encourages addictive behaviors
It will either push them out of business, or they'll find a way to screw the player to increase margin through even more deceptive products.
If the legal entity can't operate because of a tax on revenue than illegal offshore entities will gladly take their place and do.
The only solution really is sharia law, a complete ban and harsh punsihments for all operators and customers. I say this ironically but it actually is really the only solution, and even this doesnt work entirely.
In all reality, the NASDAQ does the entire yearly turnover Klashi and Polymarket combined in a few minutes. It hasnt become as big of a problem as people make it out, but its still a problem.
But there's no going back to the status quo with 1990s methods of enforcement. Everyone knows how to use crypto and VPNs, you'd just be pushing people into shady offshore.
Not everyone who has placed a bet on Kalshi or Polymarket necessarily knows how to use these tools.
> you'd just be pushing people into shady offshore.
Hurdles help. Not everyone will know how to jump every hurdle. Not everyone will be willing to put forth the effort. Will some people? Sure. But hurdles do cut down on the overall participation.
That being said I still don’t think taxing on revenue is a good idea.
Few here would be a good politician or law maker.
Gambling in contrast is strictly zero sum at best and always negative sum in reality. A group of people puts in 1x capital, the house takes a cut of that, and then the <1x gets unevenly redistributed and that's it. Nothing is generated, the collective set of people is strictly worse off after the gamble, with a few making gains off the backs of loss distributed amongst everyone else. All while hacking dopamine reward centers that didn't evolve for that.
It appears to be the case that we can't perfectly stop 100% of all IRL gambling without a cost that exceeds the benefit. That's life. But that doesn't mean we shouldn't be picking as much low hanging fruit as possible, same as with other negative sum brain hacks.
The stock market was so gambling that we had 'bucket shops' where people would just buy and sell fake stocks that tracked real stock prices.
Now we have public companies directly selling shares with no voting rights and no plans to ever pay dividends, which is the same thing.
No, that is not a strict definition of gambling, that is your own loose, personal and casual definition. The strict definition of the gambling in question under Arizona law (the subject of this article) is I believe partly under 13-3301 [0] and has a number of criteria that clearly differentiate it from investment (whether it be stock, loan by a bank or any other entity/person, or whatever else). Other polities will have their own flavors, but all of them are aimed at a net negative, destructive social activity. That's the whole point of regulating it, it's not some metaphysical philosophy thing about life having uncertainty it's about long experienced concrete harm. Trying to argue that buying shares in a broad index fund is a "wager that a meteor will not hit the Earth" is uninteresting.
>Just because it (often) is positive sum doesn't mean it isn't an unknown that people are betting money on.
It does actually! Positive sum changes everything in terms of collective incentives, strategies available and how investors can hedge risk. You may not choose to make use of all the tools available, but that doesn't make investment the equivalent of gambling. Part of the whole point of markets is to manage changing risk and information discovery (including dead ends) such that we still continue to grow overall.
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0: https://www.azleg.gov/ars/13/03301.htm
Wait, no I didn't. That's absurd. Tylenol can cause long term health issues if used in excess (or death, for extreme overdoses), but most illegal drugs are illegal because they can cause immediate death even at normal usage amounts.
No drug I'm aware of causes immediate death in normal usage, except perhaps those used for lethal injection. Would you like to elaborate on that? Tylenol, on the other hand, causes an unpreventable (no antidote) slow drawn out death over about a week, where your body will be slowly decaying and you have time to say goodbye to all your loved ones, if you take a few times the normal dose by mistake
If cocaine was really a problem then C-suites and politicians would be regularly dieing.
A drug is dangerous when it is toxic at an easily obtainable dose AND there is a clear incentive for people to consume it in that dose, such as addiction and tolerance. While acetaminophen is unusually toxic at doses only slightly higher than regular treatment doses, there is actually very little that compels people to use those doses, and acetaminophen toxicity is not an epidemic-level health problem the way many other drugs have become.
Doubling your meds on a bad pain day can put you way beyond the safe limits. People think it’s safe because basically every other OTC has a huge therapeutic band, and double dosing is not recommended but not really dangerous.
CDC estimates it at 56,000 ER visits a year, 26,000 hospitalizations, 458 deaths, about a hundred unintentional deaths per year. As a point of reference, it’s about 3 accidental overdose deaths per child that dies from being locked in a hot car.
Either way, we don't have to assume, we can directly check the numbers. Per another commenter, Tylenol kills about 458 people in the USA every year. In contrast, death from overdose on illegal stimulants was estimated at ~33.000 people in the USA.
Now, is it fair to say that Tylenol is more dangerous than marijuana? Of course. But to say it's more dangerous than most illegal drugs? Obviously not.
I know that a lot of illegal drug overdoses are caused by people who thought they were taking a normal dose but got the wrong substance, wrong amount or wrong concentration from their dealer - who in many cases also didn't know about the discrepancy because of unreliable supply chains and difficulty of testing, both caused by illegality.
Unlike sports gambling or casinos, the stock market actually does have some legitimate utility, as compared to being (at best) pure entertainment.
Theoretically, more gamblers should mean better price discovery because the payouts for correctly taking the opposing side of the trade are higher.
The market solution would be that the gambling will eventually solve itself. They’ll either learn enough to be trading on knowledge rather than vibes, fueling price discovery, or they’ll exit the market when they’ve lost too much or everything.
My sticking point is that a lot of brokers offer leverage to people they really shouldn’t. I could have sworn you had to be a qualified investor to get leverage, but if that isn’t law it should be. Show the brokerage your certification, or a pile of cash large enough to convince them you can afford to lose the whole thing.
That said, I recognize the broader point. Betting on everything, especially things that betters can directly influence is incredibly dangerous.
https://www.agweb.com/news/business/rain-robbers-how-four-fa...
gacha mechanics
I view favored house-odds, on arbitrary games or not, as unethical and predatory. This is the classic casino slot machine and related. However, Poker doesn't have house odds, it is a fair game.
Move one level up: prediction markets don't have house-odds if implemented plainly. On non-game events, they also have a positive externality, which already contradicts your claim: prediction markets predict quite well.
Yet another level up: investing in the stock market. The same authentic gambler who burns money into a slot machine can play the stock market to similarly disastrous ends. But if you define this as gambling and want to outlaw or limit it to 'professionals' then you bar people from capital markets which is absurd.
This is often called "insider trading" instead of "house odds", but it is ultimately the same thing, the same moral hazard. And note that this is illegal, both in the stock market and in commodities trading - though enforcement varies, and is not very easy anyway.
I'd also note that there are significant problems with random reward games / gambling even when there is no house advantage. Gambling addiction is a real problem that destroys some people's lives, just like alcoholism. And people can become addicted and lose their houses by playing poker just as much as they can by betting on roulette.
The difficulty with taxing prediction markets is that encouraging gambling on some events incentivizes gamblers to try to influence those events in a way contrary to how people would want to influence them in the absence of gambling, which typically means gamblers are incentivized to influence events in a way that will increase societal harms. For some events, resolving one way or the other is inconsequential, but this is not true for many of the events I see people gambling on in prediction markets.
These laws have profound effects and it takes people time to learn about what they pertain to, especially new technology or new ways of using it. It's good to have periods of feedback between the public, the courts, the legislature and the executive branch. The same things that slow down what we most want to happen quickly also slow down the things we desperately want to avoid.
"If only the law moved as quickly as an individual" is great until you get a guy like Trump in power.
The legal system tells itself this noble story of measured action without realizing it actually became the bad guy many decades ago.
My brief little opinion here is half informed from dating a lawyer for a few years.
What does 9th circuit or some circuit court mean?
It some name of a specific court, just not the place name?
Or is it special kind of court and “9” is some sort of level? Importance or hierarchy related? Escalation level? (Assuming your SC eventually is also at the top like in India)
Other appeals courts have jurisdiction over other areas of the country - and there is no question of level between them, as they have completely separate jurisdictions.
It's important also that every circuit court is beholden to its own precedent, and every court below them is beholden to the precedent set by their appeals court. But courts in other areas of the country are not - it's perfectly legal (though not extremely common) for one appeals court to decide one way and another to decide a different way on the same matter of Federal law. Unless the SC intervenes, the appeals court of your particular jurisdiction is the ultimate authority on how that federal law is to be interpreted in your jurisdiction.
So, the fact that the 9th circuit decided that Kalshi is a gambling site and not a commodity futures trading platform means that they have to be treated this way by all federal and state agencies in California, Arizona, etc; but they could still be recognized as falling under CFTC rules in Texas or New York, as the 9th circuit decision is not applicable in those jurisdictions.
And I learned an interesting tidbit from one of the commenters here.
That said, I've never touched Kalshi or that other one or the lottery. It's all a scam anyway.
if an online sales provider could hedge against the risk of that win, the gamble would help pay for all the chaos as a result
Lloyds will insure your rocket cargo or even provide terrorist strikes.
Doesn’t mean we need people wagering at kalshi on “number of terrorism fatalities in London before end of 2025”.
Reminds me of something from the last decade, but I am not sure anymore if it was a discussion or a desceiption: how to structure a "murder for hire" platform to give it plausible deniability/legality by turning it into bets. "I bet $100.000 @ketzu lives to the end of the year" can be read as life insurance, tasteless betting, or as a challenge to someone betting against it. (which is why here you need a legitimate interest to buy life insurance on someone)
I'm sorry, Lloyd's will _what_??
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 professionals let alone to the average citizen does not give proper notification of what the law is to the people subject to it.
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.
You could live in Germany or France if you prefer a legal system more ruled by clear statute?
The statute gives the general intent, but with an understanding that until the shit hits the fan in an actual court case, noone will have truly considered the detailed ramifications, so leave some intentional ambiguity there for the courts to resolve on real, actual, grounded cases rather than theorizing.
And if the legislature disagrees with a courts opinion about the ambiguity it left, it is very free to clarify in statute, which will override the court! (Unless the issue is constitutional, in which case the legislature is very free to draft a constitutional amendment!)
"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.