3 ms·

Kalshi CEO: 'State law doesn't really apply' to us

27 points by impish9208 2y ago

brutal_chaos_ 2y ago
Can you all help me understand this argument? We have stats upon stats to help us predict outcomes in sports and we call that betting. We have stats upon stats to help us predict outcomes in elections, but we can't call that betting? I admit I am out of depth here. What is the difference?
- dmitrygr 2y ago
  > We have stats upon stats to help us predict outcomes in elections 2016 called
  - brutal_chaos_ 2y ago
    True, but it's still a bet, no?
  - SllX 2y ago
    People really read 2016 wrong. At no point was Hillary Clinton 100% guaranteed to win the election. 538's final call right before the election was 65% Clinton, 35% Trump; or in other words, under Nate Silver's model, Trump had a 35% chance of winning. And he did win, and just barely at that.
- TheCleric 2y ago
  In my opinion? Of course it’s gambling. Where I would define gambling as wagering money on a predefined event for a predefined payout and little to no payout for the event not occurring. In regards to where they got into it with the CFTC (essentially being able to bet on elections) they pitched it as essentially the same as other forecast markets that are legal wherein you’d make the wager as a hedge against other financial hardships. Bet on the thing you don’t want to happen and either you’re happy it didn’t or you get paid if it does. Though in that way insurance is a bit like gambling. This boils down, as far as I can tell, is the CFTC has preliminarily been told that its authority to exclude these kinds of contracts only apply to “gaming” and not “gambling” (where gaming involves being a participant in a game of stakes). So Kalshi is trying to say that essentially supersedes state laws. I doubt that will hold water in the long run, but you never know until a court rules.
- zamadatix 2y ago
  Whether or not many people have estimated the odds is not what defines what a bet is, it's just something that people placing a bet are going to look at. Derivatives exchanges are handled separately from betting because they have other tangible benefits the to financial marketplace. I'm not sure I buy the pitch that prediction markets should fall into the same carveout at face value, but why has nothing to do with how many stats are run.
deleted 2y ago
[deleted]
xrd 2y ago
I did not know about Kalshi until today. A blog I really like pointed me to this discussion: https://moontower.substack.com/p/dire-wolf https://moontower.substack.com/p/dire-wolf Also, I really like Michael Lewis's podcast about the rise of sports gambling. My favorite episode is this one about a guy named Rufus Peabody, who changed sports gambling with his data driven approach. https://www.pushkin.fm/podcasts/against-the-rules/episode-4-a-hard-way-to-make-an-easy-living https://www.pushkin.fm/podcasts/against-the-rules/episode-4-... The best line: "Theoretically? Theoretically a dick does not fit..."
- scrlk 2y ago
  > Rufus Peabody, who changed sports gambling with his data driven approach FWIW, quant sports betting trading firms have been around for a long time, just that they tend to be extremely low key (bookies ban people who win too much).
linksnapzz 2y ago
Once upon a time, these sort of "gambling but with extra steps" businesses would have to worry about a visit from the nice men of the Chicago Outfit, who had perhaps more effective means of persuasion than the CFTC.
deleted 2y ago
[deleted]
deleted 2y ago
[deleted]

27 points by impish9208 2y ago

Can you all help me understand this argument? We have stats upon stats to help us predict outcomes in sports and we call that betting. We have stats upon stats to help us predict outcomes in elections, but we can't call that betting? I admit I am out of depth here. What is the difference?

dmitrygr 2y ago
> We have stats upon stats to help us predict outcomes in elections 2016 called
- brutal_chaos_ 2y ago
  True, but it's still a bet, no?
- SllX 2y ago
  People really read 2016 wrong. At no point was Hillary Clinton 100% guaranteed to win the election. 538's final call right before the election was 65% Clinton, 35% Trump; or in other words, under Nate Silver's model, Trump had a 35% chance of winning. And he did win, and just barely at that.
TheCleric 2y ago
In my opinion? Of course it’s gambling. Where I would define gambling as wagering money on a predefined event for a predefined payout and little to no payout for the event not occurring. In regards to where they got into it with the CFTC (essentially being able to bet on elections) they pitched it as essentially the same as other forecast markets that are legal wherein you’d make the wager as a hedge against other financial hardships. Bet on the thing you don’t want to happen and either you’re happy it didn’t or you get paid if it does. Though in that way insurance is a bit like gambling. This boils down, as far as I can tell, is the CFTC has preliminarily been told that its authority to exclude these kinds of contracts only apply to “gaming” and not “gambling” (where gaming involves being a participant in a game of stakes). So Kalshi is trying to say that essentially supersedes state laws. I doubt that will hold water in the long run, but you never know until a court rules.
zamadatix 2y ago
Whether or not many people have estimated the odds is not what defines what a bet is, it's just something that people placing a bet are going to look at. Derivatives exchanges are handled separately from betting because they have other tangible benefits the to financial marketplace. I'm not sure I buy the pitch that prediction markets should fall into the same carveout at face value, but why has nothing to do with how many stats are run.

deleted 2y ago

[deleted]

xrd 2y ago

I did not know about Kalshi until today. A blog I really like pointed me to this discussion: https://moontower.substack.com/p/dire-wolf https://moontower.substack.com/p/dire-wolf Also, I really like Michael Lewis's podcast about the rise of sports gambling. My favorite episode is this one about a guy named Rufus Peabody, who changed sports gambling with his data driven approach. https://www.pushkin.fm/podcasts/against-the-rules/episode-4-a-hard-way-to-make-an-easy-living https://www.pushkin.fm/podcasts/against-the-rules/episode-4-... The best line: "Theoretically? Theoretically a dick does not fit..."

scrlk 2y ago
> Rufus Peabody, who changed sports gambling with his data driven approach FWIW, quant sports betting trading firms have been around for a long time, just that they tend to be extremely low key (bookies ban people who win too much).

linksnapzz 2y ago

Once upon a time, these sort of "gambling but with extra steps" businesses would have to worry about a visit from the nice men of the Chicago Outfit, who had perhaps more effective means of persuasion than the CFTC.

deleted 2y ago

[deleted]

deleted 2y ago

[deleted]