> “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.
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.
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
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.
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.
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.
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.
DraftKings alone is estimated to do $6.5bn in revenue in 2026, and the whole US segment is close to $20bn. This is the market that Kalshi et al. are targeting, and these are huge sums of money. You can make sports betting artificially look small by comparing it to the entire equities market (but why?!), however the more reasonable standard of retail product/entertainment companies these are big and rapidly growing businesses.
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.
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.
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.
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.
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.
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.
Read the article more carefully. It hasn't. The 3rd circuit has already made the opposite decision. There will be appeals to determine which appellate court was right and which wrong.
And this decision seems especially questionable. It is based on the idea that "reading event to mean outcome is an archaic or rare usage". That "archaic and rare outcome" is the standard meaning of the term in probability theory and is clearly the intended meaning of the word by legislators in the context.
> 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.
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.
"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.
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
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.
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, federal debt, war, abortion, etc. They are hands off unless it involves new spending.
> 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.
> 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.)
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.
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.
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.
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.
It doesn’t because the UK has FPtP yet doesn’t have a hard two party system.
Scotland, Wales and Northern Ireland have nationalist movements that want out of the UK-state independence movements exist in the contemporary US too, but they are very fringe
But even England has not just Labor and the Tories, but also the Lib Dems, Reform, the Greens, Restore
So England proves you can have multiple parties with real power, with FPtP, even in the absence of regional-nationalist movements
I actually think the US hard two party system isn't purely due to first-past-the-post, it is actually due to four interacting factors: (1) first-past-the-post; (2) presidentialism; (3) a deeply-entrenched primary system; (4) cultural homogeneity
Point (4) will likely strike many Americans as dubious, but the US doesn't have anything comparable to Québec – there is presently no US state where English isn't the majority language; nor anything comparable to Scotland or Northern Ireland (no state where a significant percentage of its population identify with a competing national identity). So, no matter how much (undeniable) diversity the US has, in the sense that counts for this purpose, it doesn't.
Hence: while abolishing first-past-the-post would no doubt do a lot to break the US hard two-party system, it could also be broken while retaining it if something happened to (2) or (3) or (4) instead.
But, in US politics, changing (2) or (3) is even more politically fringe than changing (1) is. Maybe that might change at some point though, who knows what the future holds.
And (4) will likely eventually cease to be true, but only in the long-run in which we are all already long-dead.
I don't mean that the two party system we have is due to first-past-the-post, it almost doesn't even really matter why we have it. But first-past-the-post is the mechanism which currently entrenches it and is the most likely to change. I think that (3) is a result of the system, not a cause.
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.
> 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.
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.
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.
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.
The very first sentence in the post you responded to specifically calls out the influence of the slave states on the composition of the Senate…
> Well, one should also remember that they thought protecting the opulent minority was so important that an entire house ought to represent them.
‘They’ are the founding fathers, the ‘opulent minority’ is referring to slaveholders, ‘an entire house to represent them’ is the Senate. Senators used to be nominated by the governor of the state. Plus there was the 3/5th compromise that gave even more power to southern states.
The bicameral legislature is a good idea and it actually works more or less as intended. You don’t want the government changing too dramatically year to year but you also want responsiveness - thus one part is reelected every 2 years and the other has offset 6-year terms. It’s a good balance structurally.
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…
They had factions, which turned almost immediately into parties: the Federalists and Anti-federalists, which morphed into the Democratic-Republicans. There were always two after that, until the former died off and the latter split into what we have had since.
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.
> 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.
> 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.
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.)
> 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.
> 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 transfer org. 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.
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.
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.
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
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.
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.
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.
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.
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.
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
> 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)
Under the federal law creating the CFTC, a swap applies to transactions or events that are themselves economic in nature. It doesn't extend to related economic activity.
Strictly speaking, the law as originally written required the parties engaged in the swap to be involved in the market/market transactions being swapped. It didn't allow for third parties to engage in swaps based on things they weren't economic participants in.
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).
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..
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.
Yeah, the idea is over 25 years old here in Europe and is called "betting exchange". Their only innovation is getting it regulated as commodity trading rather than online gambling.
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[ 0.22 ms ] story [ 7.1 ms ] threadIncredible 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.
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
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.
gacha mechanics
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.
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.
And this decision seems especially questionable. It is based on the idea that "reading event to mean outcome is an archaic or rare usage". That "archaic and rare outcome" is the standard meaning of the term in probability theory and is clearly the intended meaning of the word by legislators in the context.
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.
"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
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, federal debt, war, abortion, etc. They are hands off unless it involves new spending.
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.)
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.
Changing that will require a radical reconsideration of democracy, like replacing FPtP with... something.
Scotland, Wales and Northern Ireland have nationalist movements that want out of the UK-state independence movements exist in the contemporary US too, but they are very fringe
But even England has not just Labor and the Tories, but also the Lib Dems, Reform, the Greens, Restore
So England proves you can have multiple parties with real power, with FPtP, even in the absence of regional-nationalist movements
Point (4) will likely strike many Americans as dubious, but the US doesn't have anything comparable to Québec – there is presently no US state where English isn't the majority language; nor anything comparable to Scotland or Northern Ireland (no state where a significant percentage of its population identify with a competing national identity). So, no matter how much (undeniable) diversity the US has, in the sense that counts for this purpose, it doesn't.
Hence: while abolishing first-past-the-post would no doubt do a lot to break the US hard two-party system, it could also be broken while retaining it if something happened to (2) or (3) or (4) instead.
But, in US politics, changing (2) or (3) is even more politically fringe than changing (1) is. Maybe that might change at some point though, who knows what the future holds.
And (4) will likely eventually cease to be true, but only in the long-run in which we are all already long-dead.
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.
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.
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.
> Well, one should also remember that they thought protecting the opulent minority was so important that an entire house ought to represent them.
‘They’ are the founding fathers, the ‘opulent minority’ is referring to slaveholders, ‘an entire house to represent them’ is the Senate. Senators used to be nominated by the governor of the state. Plus there was the 3/5th compromise that gave even more power to southern states.
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.
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
we're essentially one year of three into one of the least effective lame duck legislative bodies we'll ever see
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.)
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 transfer org. 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.
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.
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.
I call $50 on Tails!
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.
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”.
I'm sorry, Lloyd's will _what_??
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)
Strictly speaking, the law as originally written required the parties engaged in the swap to be involved in the market/market transactions being swapped. It didn't allow for third parties to engage in swaps based on things they weren't economic participants in.
It's the regulated gambling corporations who are rattling their sabres right now.
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.
That said, I've never touched Kalshi or that other one or the lottery. It's all a scam anyway.