Information aggregation is the theoretical upside of prediction markets. Granted, their effectiveness in that role is an empirical question. For gambling in general, the upside is that people obviously enjoy it, not to mention the right/freedom to make choices about how one spends time and money as a responsible adult.
If harm to the consumer and societal burden are the downsides you're concerned about, you could justify banning smoking, alcohol, and junk food for the same reasons. We don't generally do that because we recognize that where there's demand there will be a market, whether it's legal or illegal. So you also need to weigh the potential harms of a black market against those of a legal and regulated market.
as the article notes, prediction markets are regulated by the CFTC as a commodities futures contract, so I'm not sure how any state law survives a federal pre-emption challenge. On the other hand, it's a little unusual to see a federal agency suing to protect its turf. Would've expected a class action by a Minnesota user of the service to bring the challenge instead.
The stock market by itself has similar outcomes to the prediction markets (you buy X hoping it'll go up so you can earn $Y), but there's actual value being purchased. If I buy an apple stock, I own 0.001% or whatever of the company. If the company goes up to $10T in value, my little share is a percentage of that. I can sell it and be happy.
If the company goes to $0 then I own a portion of nothing, and so does everyone else who owns a share.
With prediction markets you don't own anything, and regardless of the outcome, someone can still win if they "bet right"
That said, futures and derivatives seem similar to prediction markets but I don't know enough about them to say more.
For the record, Minnesota currently has a complete ban on sports betting.
We've seen a couple other states that allow sports betting go after prediction markets. Personally, I feel that any state that allows sports betting is going to struggle to argue a case to ban prediction markets because you're essentially arguing over implementation details. Even arguments that certain prediction markets are ripe for insider trading or morally wrong fall a bit flat when you realize that traditional sportsbooks let you bet on things like college basketball player props and the little league world series.
I'm still not sure Minnesota will win their case, but it feels like that detail gives them a lot better chance of winning compared to many other states.
The CFTC uses the following argument in their press release: [1]
> This Minnesota law turns lawful operators and participants in prediction markets into felons overnight,” said CFTC Chairman Michael S. Selig. “Minnesota farmers have relied on critical hedging products on weather and crop-related events for decades to mitigate their risks. Governor Walz chose to put special interests first and American farmers and innovators last.
Its an interesting angle; how do you draw the line between "a prediction market about what the temperature will be" and a futures contract that's used as a legitimate hedge? Minnesota's law is EXTREMELY broad in its definition: [2]
(e) "Prediction market" means a system that allows consumers to place a wager on the future outcome of a specified event that is not determined or affected by the performance of the parties to the contract, including but not limited to: (1) an athletic event or game of skill, or portions thereof or individual performance statistics therein; (2) any game played with cards, dice, equipment, or any mechanical or electronic device or machine; (3) war, state or national emergencies, natural or human-made disasters, mass shootings, acts of terrorism, or public health crises, or the ancillary effects thereof; (4) any event or events happening to a natural person or group of people;(5) a federal, state, or local election, or the actions or conduct of the federal, state, or local government and the government's agencies, employees, and officers; (6) legal actions, including but not limited to a civil or criminal suit, grand jury action, jury trial, settlement, plea, or conviction; (7) the death, assassination, or attempted killing of a person or group of persons, or mass casualty events; (8) short-term weather events or conditions; (9) events in popular culture, including but not limited to awards and the date a piece of entertainment will be released; and (10) whether a person will make a particular statement.
There's a bunch of exceptions that reference prior laws, which I haven't gone through, though they'd likely have to exempt, you know, Chase Bank, because if not that definition would clearly disallow Stocks.
> Personally, I feel that any state that allows sports betting is going to struggle to argue a case to ban prediction markets because you're essentially arguing over implementation details.
This seems to be based on the false assumption that state legislation on distinct but related topics must generally be based on a coherent, consistent rationale. This is, very much, not the case under any law that binds US states, nor is it a rule that, despite not existing in binding law, is in practice imposed as a constraint on state governments by the actions of the voters.
(Conversely, even if such a rule was imposed, in law or otherwise, any state that has rules regulating the offering of insurance contracts, including who could buy insurance against what events—which, as it turns out, every state does—would have exactly the basis they need to apply the same kinds of rules to prediction markets.)
I don't particularly care for sports betting, but I'm extremely against the prediction markets that blatantly violate he Dodds Frank act, such as bets on whether America Will attack another country or if fires will swallow California.
the argument that prediction models are sports betting is not much different than the argument that stocks are sports betting. Who's to say that capitalism isn't a competitive sport? I mean consider that people have agents making trades for them. It is basically a video game at this point.
I'm not a fan of sports betting, but surely you can see how betting on a game is not the same thing as betting on a war? People generally don't die because of a sports game (although it happens rarely).
I think the case is pretty clear regardless: gambling is supposed to be a state-regulated activity, and Kalshi is gambling but is regulated by the CFTC at the federal level. So I think the argument is "we want to be the ones to regulate sports gambling in our state," whoch is independent of whether or not it's currently legal in the state.
Or maybe I'm wrong, and "we don't want sports gambling" is different legally from "we want to be the regulator of gambling." But it seems like they're just variations of the same question, which is: do states have the power to regulate this?
> The prohibition extends to services supporting prediction markets, like virtual private networks, that could allow consumers to disguise their location and get around the ban.
There should be a ban on the instagram reels showing gambling like it's not a big deal. They are deliberately targeting teens and it's quite sickening.
If you work at one of these companies it's the same as working for a payday loan company. You are making blood money.
I recently learned that a World of Warcraft AWC champion that I used to follow has been streaming slots on Twitch for hours a day, every day for the last year. I don't watch Twitch, so I was blown away that they allow that kind of thing on their platform. The cherry on top is that he runs some kind of fake gambling extension in his chat while he's streaming, where viewers bet on how much money he'll win or lose and they'll win or lose Twitch chat points alongside him.
I have no problem with Twitch channel points gambling via predictions, but doing that alongside actual* gambling is really messed up. It's blurring the line to the viewers between the two. And probably putting ideas in their head like "oh I won so many channel points predicting the outcomes, I should do some real gambling!"
*It could be sponsored and thus either rigged or all of the money being used was provided by the company under the expectation that it would be paid back to them through losses.
Given that exactly the same thing has been regulated as gambling in Europe under the name "betting exchange" for 25 years the case for it being gambling is quite strong.
I could imagine cases where prediction markets could offer some actual insight, but in practice they seem few and far between. Most markets I've seen devolve into one or more of: betting on unimportant events (e.g. sports games), insider trading, or poorly written ambiguous resolution criteria. It's just hard for me to imagine that, on net, these markets will offer more societal good than the harm we've seen from sports betting.
> I could imagine cases where prediction markets could offer some actual insight
I could imagine that there's very little insight to be gained when some 23 year old has so little hope for his financial future that he's spending some of what he earned last night delivering food for uber eats on making a completely uninformed bet on a geopolitical situation involving a country he couldn't even find on a map just in case it pays out well enough that he can afford some of the needed medical care he's been putting off. That's the type of user I imagine most people participating in prediction markets are. It's telling that the vast majority of the people making bets lose their money. Are their predictions really valuable data?
They're not going to get rid of them, they're just going to drive them underground, which will make them impossible to regulate, which will make using them less safe. I don't participate in prediction markets, but I would bet everything I own on this outcome.
That's already what it is. They are an underground gambling site pretending that they're not doing things that they literally do by calling it something else. They're like a drug dealer who thinks they're slick by calling their drugs "research chemicals".
While it's obviously sports betting, the fact is that federal law gives the CFTC the power to determine what is and isn't a future and expressly preempts state intervention in futures markets. And, the case as to why futures markets generally should be subject only to federal oversight is quite strong IMO. So, the case can quickly become whether or not the CFTC should consider sports betting to be a future, and judges typically defer to the executive branch when it's not obvious (and in this case I don't think it is, the bar owner in Philly hedging an Eagles loss is an entirely plausible, albeit unlikely and uncommon, situation).
While I am partial to the argument that the CFTC is actually taking away the states' 10th Amendment police power right, that is a somewhat tenuous case in comparison to the enumerated right of the federal government to provide sole jurisdiction to the executive branch to enforce a law (and not to mention a law that impacts interstate commerce).
I imagine Minnesota loses this case and what's far more likely is either a more liberal congress changes what is a future by law or a more liberal executive branch reduces the protections for Kalshi et al.
Remember in the late 2010s when the hack Ajit Pai, then fCC Chair, said that the FCC couldn't or shouldn't enforce Obama-era Title 8 net neutrality? Remember how states like California then said "OK, it's not a federal issue so we'll do it at the state level"? Then remember how the DoJ, at the FCC's direction, sued California [1]?
Well, which is it? Was net neutrality a state or federal issue? The answer is it's, as always, a Schrodinger's STate's rights issue. That is, it's a "state's rights" issue when it suits them, a federal issue when it suits them and it's neither when it suits them. Lack of any kind of regulation is the goal. This isn't some libertarian pipe dream. It's just naked pro-company and pro-billionaire gutting of government to boost profits.
Fast forward to prediction markets. The CFTC regulates this (arguably). Another deregulation hack is in charge. And again, states like Minnesota who already ban sports betting are being sued. "State's rights" btw. We're seeing the exact same pattern.
This on the same day that the president who sued the IRS, which was defended by the president's DoJ and the recess appointee Attorney-General settled a $10 billion lawsuit right as a federal judge tosses it because the case lacked adversity [2].
Besides the J6 slush fund, part of this settlement is that the IRS is barred from ever investigating Trump, his family or the Trump Organization for tax fraud.
The level of corruption and kleptocracy here is beyond belief and what's really frightening is that a good 35-40% of the population not only don't care but actively support something they will never benefit from and there hasn't been (and won't be) any political price paid for any of it. The president's endorsement still carries weight and just today, we've had the most expensive Congressional primary in history (~$35 million) where Trump unseated a sitting Congressmen for daring to push for releasing the Epstein files.
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[ 2.8 ms ] story [ 76.4 ms ] threadIf harm to the consumer and societal burden are the downsides you're concerned about, you could justify banning smoking, alcohol, and junk food for the same reasons. We don't generally do that because we recognize that where there's demand there will be a market, whether it's legal or illegal. So you also need to weigh the potential harms of a black market against those of a legal and regulated market.
If the company goes to $0 then I own a portion of nothing, and so does everyone else who owns a share.
With prediction markets you don't own anything, and regardless of the outcome, someone can still win if they "bet right"
That said, futures and derivatives seem similar to prediction markets but I don't know enough about them to say more.
We've seen a couple other states that allow sports betting go after prediction markets. Personally, I feel that any state that allows sports betting is going to struggle to argue a case to ban prediction markets because you're essentially arguing over implementation details. Even arguments that certain prediction markets are ripe for insider trading or morally wrong fall a bit flat when you realize that traditional sportsbooks let you bet on things like college basketball player props and the little league world series.
I'm still not sure Minnesota will win their case, but it feels like that detail gives them a lot better chance of winning compared to many other states.
> This Minnesota law turns lawful operators and participants in prediction markets into felons overnight,” said CFTC Chairman Michael S. Selig. “Minnesota farmers have relied on critical hedging products on weather and crop-related events for decades to mitigate their risks. Governor Walz chose to put special interests first and American farmers and innovators last.
Its an interesting angle; how do you draw the line between "a prediction market about what the temperature will be" and a futures contract that's used as a legitimate hedge? Minnesota's law is EXTREMELY broad in its definition: [2]
(e) "Prediction market" means a system that allows consumers to place a wager on the future outcome of a specified event that is not determined or affected by the performance of the parties to the contract, including but not limited to: (1) an athletic event or game of skill, or portions thereof or individual performance statistics therein; (2) any game played with cards, dice, equipment, or any mechanical or electronic device or machine; (3) war, state or national emergencies, natural or human-made disasters, mass shootings, acts of terrorism, or public health crises, or the ancillary effects thereof; (4) any event or events happening to a natural person or group of people;(5) a federal, state, or local election, or the actions or conduct of the federal, state, or local government and the government's agencies, employees, and officers; (6) legal actions, including but not limited to a civil or criminal suit, grand jury action, jury trial, settlement, plea, or conviction; (7) the death, assassination, or attempted killing of a person or group of persons, or mass casualty events; (8) short-term weather events or conditions; (9) events in popular culture, including but not limited to awards and the date a piece of entertainment will be released; and (10) whether a person will make a particular statement.
There's a bunch of exceptions that reference prior laws, which I haven't gone through, though they'd likely have to exempt, you know, Chase Bank, because if not that definition would clearly disallow Stocks.
[1] https://www.cftc.gov/PressRoom/PressReleases/9233-26
[2] https://www.revisor.mn.gov/bills/94/2026/0/SF/4760/versions/...
This seems to be based on the false assumption that state legislation on distinct but related topics must generally be based on a coherent, consistent rationale. This is, very much, not the case under any law that binds US states, nor is it a rule that, despite not existing in binding law, is in practice imposed as a constraint on state governments by the actions of the voters.
(Conversely, even if such a rule was imposed, in law or otherwise, any state that has rules regulating the offering of insurance contracts, including who could buy insurance against what events—which, as it turns out, every state does—would have exactly the basis they need to apply the same kinds of rules to prediction markets.)
There's just too many wrong incentives at play.
Or maybe I'm wrong, and "we don't want sports gambling" is different legally from "we want to be the regulator of gambling." But it seems like they're just variations of the same question, which is: do states have the power to regulate this?
I'm sorry, what the fuck?
If you work at one of these companies it's the same as working for a payday loan company. You are making blood money.
*It could be sponsored and thus either rigged or all of the money being used was provided by the company under the expectation that it would be paid back to them through losses.
Of course, we all have to sit through another round of Silicon Valley pretending they've discovered some new exciting business model that's just vice.
Unlicensed gypsy cabs, SROs, shift work, patent medicines, narcotics dealing, customs fraud, and smuggling already had established market entrants I guess.
I could imagine that there's very little insight to be gained when some 23 year old has so little hope for his financial future that he's spending some of what he earned last night delivering food for uber eats on making a completely uninformed bet on a geopolitical situation involving a country he couldn't even find on a map just in case it pays out well enough that he can afford some of the needed medical care he's been putting off. That's the type of user I imagine most people participating in prediction markets are. It's telling that the vast majority of the people making bets lose their money. Are their predictions really valuable data?
While I am partial to the argument that the CFTC is actually taking away the states' 10th Amendment police power right, that is a somewhat tenuous case in comparison to the enumerated right of the federal government to provide sole jurisdiction to the executive branch to enforce a law (and not to mention a law that impacts interstate commerce).
I imagine Minnesota loses this case and what's far more likely is either a more liberal congress changes what is a future by law or a more liberal executive branch reduces the protections for Kalshi et al.
Well, which is it? Was net neutrality a state or federal issue? The answer is it's, as always, a Schrodinger's STate's rights issue. That is, it's a "state's rights" issue when it suits them, a federal issue when it suits them and it's neither when it suits them. Lack of any kind of regulation is the goal. This isn't some libertarian pipe dream. It's just naked pro-company and pro-billionaire gutting of government to boost profits.
Fast forward to prediction markets. The CFTC regulates this (arguably). Another deregulation hack is in charge. And again, states like Minnesota who already ban sports betting are being sued. "State's rights" btw. We're seeing the exact same pattern.
This on the same day that the president who sued the IRS, which was defended by the president's DoJ and the recess appointee Attorney-General settled a $10 billion lawsuit right as a federal judge tosses it because the case lacked adversity [2].
Besides the J6 slush fund, part of this settlement is that the IRS is barred from ever investigating Trump, his family or the Trump Organization for tax fraud.
The level of corruption and kleptocracy here is beyond belief and what's really frightening is that a good 35-40% of the population not only don't care but actively support something they will never benefit from and there hasn't been (and won't be) any political price paid for any of it. The president's endorsement still carries weight and just today, we've had the most expensive Congressional primary in history (~$35 million) where Trump unseated a sitting Congressmen for daring to push for releasing the Epstein files.
[1]: https://www.justice.gov/archives/opa/pr/justice-department-f...
[2]: https://www.msn.com/en-us/news/insight/trump-eyes-1-776b-irs...
[3]: https://www.washingtonpost.com/national-security/2026/05/19/...