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
> 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.
> 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?
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, 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.
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.
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.
> “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.
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.
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.
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.
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,
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 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.
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.
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.
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.
>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.
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.
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.
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.
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.
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)
The equivalent of one of India's high courts. It's one of 9 regional courts that is the last stop before the highest court in the country, the Supreme Court. The 9th covers California, Oregon, Washington State, and Hawaii
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
> 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.
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?
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!)
"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
> 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.
> 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.
Now they’re getting out of jail with a few donations
It was a different time.
offering services illegally is one thing, defrauding investors in Ponzi schemes is different
What kind of society do you get when the positive EV play is to always break the law first, litigate later?
If you're in the USA, you can see for yourself by looking out the window. It's not great!
> 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?
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, debt, war, abortion, etc. They are hands off unless it involves new spending.
the lesson congress learned from the Hillary Clinton coronation getting derailed by Obama was to absolutely never ever vote on anything important
Can you elaborate what you mean?
> 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.
Theoretically you could vote of no confidence you way into a third party
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.
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.
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
> “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.
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.
> 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
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.
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.
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.
> 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.
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,
> 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.
Sorry for the ninja edit about jurisdictions.
I live in a different country since we don't have states here.
Aren't worth what? The tax? Or the vice being legal in the first place?
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 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.
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.
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.
Which we called the "stock market"
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.
> 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.
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.
Pointing that out makes as much sense as "so you're against drugs? Did you know Tylenol is a drug? Ha checkmate!"
>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.
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0: https://www.azleg.gov/ars/13/03301.htm
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...
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.
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.
You can always just ban things. The families of those who go into financial ruin from gambling would prefer this.
> gotcha mechanics
gacha mechanics
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.
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.
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.
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.
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.
(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)
The equivalent of one of India's high courts. It's one of 9 regional courts that is the last stop before the highest court in the country, the Supreme Court. The 9th covers California, Oregon, Washington State, and Hawaii
9th is a region (includes California) circuit is a level (appeals court right below Supreme)
The appeals court found sports betting isn’t shielded by the federal law used to block Kris Mayes’ prosecution.
Hope dang comes in with a headline rewrite
and why would he do that? It is an actual title of the linked article.
I wonder what this means for cases under loss recovery acts in states that have them.
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
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”.
> or even provide terrorist strikes.
I'm sorry, Lloyd's will _what_??
Looks like Kalshi lost its bet…
regulated entities mad at unregulated entities, nothing to see here, yawn
Actually exactly the reverse
Rem when mafia bookies running sports betting was a subplot on The Soprano's? It wasn't that long ago.
Well they are still doing it.
People seem to be blissfully unaware that illegal and underground gambling is still going very strong.
It's easier to be blissfully unaware when the illegal books don't bombard every fucking screen and surface with ads.
> 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.
Declaring the law void for vagueness would not favor Kalshi. It would undercut the federal preemption that Kalshi is advocating for.
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?
If vagueness isn't a problem then we can simplify the law by replacing it all with one sentence: Let there be justice.
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!)
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.