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So the CFTC frames Kalshi as a financial derivatives exchange for the financial instrument category of event contracts, dismissing NYs characterization of it as
by pamcake 2mo ago
So the CFTC frames Kalshi as a financial derivatives exchange for the financial instrument category of event contracts, dismissing NYs characterization of it as a gambling/betting platform. Interesting.
- cyanydeez 2mo agono, it frames it as a grift economy subsidy.
- pdonis 2mo agoWhat exactly is the difference between a financial derivatives exchange and a gambling platform? Both involve placing bets on uncertain future outcomes.
- morkalork 2mo agoOne is when the president's son is a strategic advisor to the company and the other is a gambling platform
- skillina 2mo agoTraditional derivatives can be used to trade the risk that would already exist with or without the existence of the derivatives market. Prediction markets create risk out of thin air.
- charcircuit 2mo agoDo you think insurance markets create risk out of thin air too?
- dcrazy 2mo agoInsurance protects life and property (including future income). Until you wagered $100 on the Knicks winning, none of your property was threatened by them losing.
- skillina 2mo agoOf course not. If a building exists, there is a risk it burns down. Insurance just moves that risk around. The only way to eliminate the risk is to not build anything anywhere.
- charcircuit 2mo agoSo what would be the difference between buying insurance against downtime of a service you depend on (eg. Cloudflare) vs making a bet on the prediction market that there will be downtime? Even without these markets there is risk that the service goes down. The existence of the prediction market doesn't cause it to be possible.
- wredcoll 2mo agoThere is no risk to me if the rockets lose their next game. Unless I bet $100 on them winning, then a risk appears.
- usehackernews 2mo agoIf you’re a Houston bar owner dependent on post game traffic, there would be risk of them losing. There are a thousand of exchanges that have no risk on my life, but that doesn’t mean they don’t impact others.
- dcrazy 2mo agoA bar here in SF made local news for using Kalshi for just this purpose: https://sfstandard.com/2026/07/06/san-francisco-world-cup-kalshi-promotion/ https://sfstandard.com/2026/07/06/san-francisco-world-cup-ka... In a similar vein, companies that run skill competitions (hole-in-one prizes, half-court shots, etc.) can and regularly do buy insurance on those events. Under this theory, Kalshi is arguably not trading in commodities, but insurance, which is state-regulated.
- amazingman 2mo ago
- amluto 2mo agoNo. And, in fact, there is a concept called an “insurable interest” that is intended to prevent this kind of thing. If I buy an insurance contract that will pay me if your house burns down and then I burn down your house, then I’ve obviously committed arson, but I have also likely purchased that insurance contract illegally. And I don’t even need to burn down your house for that contract to be illegal. (IANAL)
- FireBeyond 2mo agoThere is a (possibly apocryphal) story of a man who bought an amazingly expensive Cuban cigar, insured it as it sat in his home, then smoked it... and filed an insurance claim for its loss. After back and forth with attorneys, the insurer paid the claim. And then sued him for their loss.
- amluto 2mo agoBut he surely had an insurable interest in that cigar!
- brainwad 2mo agoIf you consider not just money, but utility, then there is already a lot of pre-existing risk that sports derivatives could hedge. Theoretically, fans should short their team to be utility-neutral whether their team wins or loses. However in practice fans tend to double down by adding monetary risk to their pre-existing emotional risk...
- amazingman 2mo agoRegulations, skill, and access.
- brianbest101 2mo ago[dead]
- none_to_remain 2mo agoThe gambling platforms are buddies with Tish James and the state, while the prediction markets are buddies with the CFTC and the feds. That's the important difference in this case
- zug_zug 2mo agoWell my broker (fidelity) requires certain degrees of experience and wealth before allowing certain types of risky trading. Perhaps sports-betting should fall under that category -- e.g. must be an accredited investor.
- Pxtl 2mo agoLaws are for poor people