Judge Pauses Arizona's Prosecution of Kalshi, Bars Arizona from Regulating Prediction Markets (apnews.com) 32
Arizona state prosecutors allege Kalshi is running an illegal gambling operation, charging the prediction market with 20 "wagering" misdemeanors. But Friday a federal judge "temporarily barred Arizona from enforcing its gambling laws against predictive market operators," reports the Associated Press, "and put the brakes on a criminal wagering case that the state has filed against Kalshi.
"U.S. District Judge Michael Liburdi's ruling means a Monday arraignment hearing for Kalshi has been called off." The order was issued in a lawsuit filed by the Trump administration. The judge's order said the federal Commodity Futures Trading Commission had sufficiently shown that "event contracts" fall within the Commodity Exchange Act's definition of "swaps," and that it had demonstrated a reasonable chance of success in showing that the act preempts Arizona law... The commission had sued Arizona in response to cease-and-desist letters sent to Kalshi from state gambling regulators and the criminal charges filed against the prediction market operator. The commission argued Arizona is intruding on its exclusive federal power to regulate national swaps markets...
Earlier this month, the federal government filed lawsuits against Connecticut, Arizona and Illinois challenging their efforts to regulate prediction market operators. The Trump administration has so far backed the platforms. President Donald Trump's eldest son is an adviser for both Kalshi and Polymarket and an investor in the latter. Trump's social media platform Truth Social is also launching its own cryptocurrency-based prediction market called Truth Predict.
Federal and state judges in Nevada and Massachusetts have now issued early rulings in favor of states looking to ban Kalshi and its competitor Polymarket from offering sports being in their states, according to the article, "while federal judges in New Jersey and Tennessee have ruled in favor of Kalshi."
And Arizona's attorney general's office said it disagrees with the court's ruling and "will evaluate our next steps."
"U.S. District Judge Michael Liburdi's ruling means a Monday arraignment hearing for Kalshi has been called off." The order was issued in a lawsuit filed by the Trump administration. The judge's order said the federal Commodity Futures Trading Commission had sufficiently shown that "event contracts" fall within the Commodity Exchange Act's definition of "swaps," and that it had demonstrated a reasonable chance of success in showing that the act preempts Arizona law... The commission had sued Arizona in response to cease-and-desist letters sent to Kalshi from state gambling regulators and the criminal charges filed against the prediction market operator. The commission argued Arizona is intruding on its exclusive federal power to regulate national swaps markets...
Earlier this month, the federal government filed lawsuits against Connecticut, Arizona and Illinois challenging their efforts to regulate prediction market operators. The Trump administration has so far backed the platforms. President Donald Trump's eldest son is an adviser for both Kalshi and Polymarket and an investor in the latter. Trump's social media platform Truth Social is also launching its own cryptocurrency-based prediction market called Truth Predict.
Federal and state judges in Nevada and Massachusetts have now issued early rulings in favor of states looking to ban Kalshi and its competitor Polymarket from offering sports being in their states, according to the article, "while federal judges in New Jersey and Tennessee have ruled in favor of Kalshi."
And Arizona's attorney general's office said it disagrees with the court's ruling and "will evaluate our next steps."
Futures trading is gambling (Score:2, Interesting)
The problem the states are going to have is that futures trading, what the CFTC regulates, is gambling. You're betting on what the price of the commodity will do in the future. The moment the CFTC expanded to allowing intangible commodities, the outcome was a foregone conclusion.
Re:Futures trading is gambling (Score:5, Informative)
Do loot boxes with surprise mechanics also count as intangible commodities? Asking for a friend.
Anyway, it was quite easy to see where these cases where headed when you factor in this: President Donald Trump's eldest son is an adviser for both Kalshi and Polymarket and an investor in the latter. Trump's social media platform Truth Social is also launching its own cryptocurrency-based prediction market called Truth Predict.
Those aren't the same thing (Score:3)
If I buy a loot box then that is literally random chance or it's supposed to be.
I'm assuming that you've picked up a bunch of nonsense propaganda from the gambling houses. It's also possible that they are so pervasive that they are starting to show up here. Either the way this is nonse
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A loot box is not a known commodity.
A loot box is a known commodity with unknown content. Also, it was a joke because the concept of loot boxes is seen as gambling in many jurisdictions which is why EA tried to call them surprise mechanics to avoid gambling laws.
The whole thing with wagering on intangible commodities is the same type of evasion but with a lot more money, and with the right people involved laws will be adjusted to make sure it isn't gambling.
Re: (Score:3)
A loot box is the digital equivalent of buying a pack of Pokemon cards. You might get some truly shitty ones, or you might luck out and get some of the more desirable ones, but at the end of the day you know you're trading money for a pack of Pokemon cards. Since everything needs a car analogy, it's like buying a used vehicle without a mechanical inspection. Maybe you'll luck out and the car will be fine, or maybe it will be a lemon - either way, you're ending up with something that technically still is
Re: (Score:3)
Gambling, on the other hand, involves wagering money, with the returns (assuming you win) also being in the form of money.
You buy the loot box, or buy points to get the loot box. The loot box contents are either transferable or not. If they are, then you can sell them (whether the platform "allows" this behavior or not) and they therefore have a cash value. Therefore the returns (potential or realized) are in the form of money. If you don't ignore these important facts, then you'll realize that loot boxes can be and often are gambling.
Re:Futures trading is gambling (Score:5, Insightful)
Anyway, it was quite easy to see where these cases where headed when you factor in this: President Donald Trump's eldest son is an adviser for both Kalshi and Polymarket and an investor in the latter. Trump's social media platform Truth Social is also launching its own cryptocurrency-based prediction market called Truth Predict.
A quick search reveals the judge in this case was of course appointed by Trump. https://en.wikipedia.org/wiki/... [wikipedia.org]
Re: (Score:3)
Liburdi served as a law clerk to Vice Chief Justice Ruth McGregor of the Arizona Supreme Court. Following his clerkship, he joined the Phoenix office of Perkins Coie as an associate. In 2008, Liburdi spent a year working for the Federal Election Commission in Washington, D.C. as a Litigation Staff Attorney. In 2011, Liburdi joined the Phoenix office of Snell & Wilmer where he was a partner for five years. He later served as general counsel to Arizona governor Doug Ducey. From 2018 to 2019, he was a shareholder in the Phoenix office of Greenberg Traurig, where he served as chair of the Phoenix litigation practice. His practice focused on complex commercial and constitutional litigation, as well as campaign finance and election procedure compliance.[2] Liburdi also served as an adjunct professor of law at the Sandra Day O'Connor College of Law at Arizona State University, where he taught election law from 2010 to 2016.[2]
This isn't one of the Trump appointees that needs to be deeply beholden to Trump. It is very tempting to think that a judicial decision one doesn't like has to be due to the judge's politics or connections, but it doesn't look like that is what is going on here.
Re: Futures trading is gambling (Score:2)
It absolutely is not (Score:4, Interesting)
What makes gambling gambling is that you are putting up money with the expectation that given a certain outcome you will get paid more money than you put up if that outcome happens and you will lose all of your money if that outcome does not happen. There's no tangible asset whatsoever you're just making a guess on an outcome.
There is a reason why we have different words to describe gambling and futures trading instead of just using the same words. They are different things.
Of course after decades of right wing lunatics being put on the courts so that they will sign off on whatever the Epstein class wants the rule of law no longer applies.
There will be consequences for you personally. Even if you don't Gamble the tens of billions of dollars lost will drag down the overall economy and help take you with it.
There is a concept called at chesterton's fence. The idea is don't take offense down unless you know why it was put up. You are in the process of taking down a fence without realizing why it was put up
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Nope. That's not true for several types of futures strategies, and it is not a good way to classify gambling vs investment.
It absolutely is not..an excuse. (Score:2)
Just because you are making a purchase based on an expectation does not mean you're gambling. At the end of the day when you purchase a future you're still purchasing something of tangible value. You might lose money because you overestimate the value of that thing but the amount of money you can lose is limited somewhat because there is still a tangible asset backing your purchase.
Translation: A person is horrifically addicted to gambling, but because of “tangible” IRS rules they are free to bet their house against The House and lose, and still call it anything but gambling. Even in bankruptcy and divorce court.
You arguing in defense of verbiage semantics is like listening to a drunk argue at an AA meeting that boxed whine doesn’t make you an alcoholic like that evil shit “vodka” does. If the end result creates the exact same problem in society at ever
Re: (Score:3)
This argument led to its logical conclusion calls any exchange of any value gambling, including barter.
You can never be certain about qualities (or even quantity) of something until you have unlimited access to it. In fact, there's many real world examples that happen daily. You can buy a vending machine sandwich only to find out it's one of these depressing scammy ones with a thin slice of ham folded up right in the front facing part of the sandwich with the rest of the bread dry and empty. You can spend a
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I'm just a guy on the internet but I don't think futures trading looks like gambling from the counterparty's POV.
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Probably. But then slot machines and roulette don't look like gambling from the casino's POV either.
60 billion out of the economy (Score:4, Insightful)
Re:60 billion out of the economy (Score:5, Insightful)
It's not just gambling. Gambling is one thing.
The problem with prediction markets is the insider trading. There's just so much of it that it's not a zero sum game, it's a negative sum game.
Anything you can bet on, someone will have an insider track to make money from it.
Heck,there are reporters being threatened because their Iran coverage causes them to lose money. It brings back all the sports betting scandals (outside the US) where your gangs all threaten a jockey or player to rig the outcome of a game or race or whatever. Now it's catching up into the US.
Any bet on those markets has an insider trader on it these days, many of whom already know the outcome, or can influence the outcome to the point it's basically a sucker bet. At least Vegas lets you have a little fun, the lottery is still fairly run, but a prediction market is just like an illegal casino - it's rigged against you. It's just another way to throw money at billionaires.
Ok, so (Score:5, Informative)
First and foremost, it doesn't matter what a judge says, or what the Commodity Futures Trading Commission has shown, because "event contracts" are NOT a form of swap no matter how you try to coax the words. They do not function similarly to any other form of swap.
Secondly, in no way, shape, or form are "event contracts" a form of commodity, or derivative thereof. They are no different than sports betting or playing craps. Thus, Arizona (and others) should ignore this judge's ruling and push their agendas anyway and claim that the Commodity Futures Trading Commission doesn't have the authority to stop them.
Kalshi and Polymarket are 100% games of chance and thus illegal gambling. Draft Kings and FanDuel should be illegal too but got classified as games of skill instead.
This bit should explain everything ... (Score:5, Informative)
Any friendly decision the CFTC makes on this industry could end up financially benefiting the president's family as well. President Trump's son, Donald Trump Jr., has invested in Polymarket through his venture capital firm and is a strategic advisor for Kalshi.
Re: (Score:2)
A new socio-economic strata, Grifter class (Score:5, Insightful)
2025-Mar [cloakinginequity.com]
2025-Oct [motherjones.com]
Re: (Score:3)
This isn't new, it's just slightly more transparent. Consider the tax rate for capital gains differing from the tax rate for wages.
As Comicus said... (Score:2)
Prosecute in three years (Score:2)
Keep the law on the books and resume prosecution in three years when this shit gets overturned.
I'm sure it's a coincidence ... (Score:1)
... that Judge Michael Liburdi was appointed by Trump
This should be interesting (Score:2)
If states cannot regulate commodities markets, New York is pretty fucked since it leverages the fact that various exchanges are located in the state to its advantage.