New York Sues Kalshi For Running 'Illegal Gambling Operation' (cnbc.com) 56
New York has sued prediction-market platform Kalshi, alleging it operates an "illegal gambling operation" without state authorization. "No matter what they call themselves, prediction markets like Kalshi are gambling platforms, plain and simple," said New York Attorney General Letitia James in a press release announcing the lawsuit. "By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process." CNBC reports: In a case filed in a Manhattan state court (PDF), the lawsuit claims that Kalshi accepts wagers as a gambling business in disregard for the state's constitution and laws by not being registered with the New York State Gaming Commission. Governor Kathy Hochul in the press release said the state is taking the action to stop what it views as illegal behavior and bring the company into compliance with New York law. The lawsuit is seeking a permanent injunction against Kalshi.
The suit by the state is also seeking a total restitution to users who have placed trades on the platform, a $100,000 penalty for each attempt to offer sports wagering, and another penalty three times the amount the company has gained while allegedly operating in violation of New York law. The state estimates that could total $36 billion.
The suit by the state is also seeking a total restitution to users who have placed trades on the platform, a $100,000 penalty for each attempt to offer sports wagering, and another penalty three times the amount the company has gained while allegedly operating in violation of New York law. The state estimates that could total $36 billion.
Re: Do they have any business presence in NY? (Score:1)
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Some New Yorkers are making an active effort to purchase illegal narcotics right now. That doesn't make it less illegal.
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Those illegal narcotics are physically in New York right now. Are the internet servers?
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It doesn't matter. There's very well established jurisprudence that places the jurisdiction of an internet service to where the service is provided, not where the servers are located. This was mostly done to fight online piracy btw.
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Did not know that. Thanks. But fighting online piracy was only the pretext; the real goal was the usual expansion of government (and thus their) power.
Re: Do they have any business presence in NY? (Score:3)
Google "International Shoe Co. v. Washington" and edify yourself.
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This is not exactly uncharted ground here.
Here's a really good article from the 2021 NY Times [nytimes.com] when it was legal to bet in New Jersey but not in New York and people literally rode their bikes to place geo-fenced NFL bets on the bridge between the two states.
In That Case... (Score:4, Funny)
What About CFTC Ruling (Score:2)
Didn't the CFTC just declare prediction markets, like Kalshi et al, to be contract markets and swaps, and that states did not have authority to regulate them as they were under CFTC jurisdiction?
So, is this a new angle or is this some BS posturing on New York's on a matter that has already been decided?
And what about the hypocrisy with them permitting Draft Kings, FanDuel, and other sports betting sites?
Re:What About CFTC Ruling (Score:4, Informative)
IANAL but the primacy clause doesn't automatically remove regulatory authority from the states. Also, imo, prediction markets should already be illegal in new york under new york's anti bucket shop law from the early 20th century.
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It's not a flawless argument, however. At it's broadest, a swap could basically refer to any financial transaction whatsoever [cornell.edu]. Courts generally frown on such promiscuous definitions, however, and the CFTC and SEC have both issued several clarifications on how they interpret that - For example, they don't consider insurance as a swap, even though by any reasonable interpretation insurance is absolutely a form of swap, and the way swaps are used in practice (prior to
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What would it take, money wise, for Kalshi and Polymarket to move out of NYC, though? If they get any hassle from NY, that is exactly what they might do, and still provide gambling services to NY, because the Feds think this can't be regulated by the states.
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And what about the hypocrisy with them permitting Draft Kings, FanDuel, and other sports betting sites?
Hypocrisy? You mean the gambling operators licensed in New York State and not claiming to not be gambling operations?
https://gaming.ny.gov/sports-w... [ny.gov]
FWIW, Kalshi and Polymarket are both based in NYC (Score:3)
Where's my cut!? (Score:1)
NY: "By ignoring our laws, Kalshi is running an illegal operation and harming New Yorkers in the process."
Kalshi: "Our mistake NY, here's your cut of the fleecing... I mean, profits."
NY: "We stand corrected. By following our laws, Kalshi is running an exemplary operation and enriching the lives of New Yorkers everywhere!"
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If the laws are already on the books what’s the problem with them being enforced?
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Yes but also no.
The regulation isn't about "taking a cut", but primarily about financial crimes like money laundering and insider trading. Generally there are age requirements, as minors can't buy stocks or enter into futures contracts, though custodial accounts where the minor is authorized to use it are allowed. Every transaction is also associated with registered brokerage companies, every transaction tied to a taxpayer ID and account information. To participate the government requires documentation wi
Wall Street (Score:2)
Have they investigated the giant casino in Manhattan?
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You mean casinos, right? You have the NYSE HQ downtown, and the NASDAQ HQ in Times Square. There are probably other smaller exchanges that I'm not aware of, but it seems like a HUGE portion of NYC's economy was already based on economic speculation before Kalshi showed up.
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If you think prediction markets are legit, and not gambling, but Pokemon packs are gambling, then you've already lost the game, because you are a fucking retard.
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something of value
Value as defined by whom? The company making the cards/packs? The person opening the packs? The collective 3rd party market that has no affiliation with the company? Because they're all different.
You pay for a booster, you get what you paid for. Random cards. That's it. The cards themselves have NO intrinsic value. Value derived from a 3rd party market doesn't mean anything. If people are opening booster packs solely to try to find the ones that "sell" for the most money on a 3rd party market (which is also
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There are plenty of places that list the value.
Which is determined by a 3rd party market completely unrelated to both the company making the cards and the user opening the packs.
The cards have a very specific value
They have a fluctuating value.
yes most times they open the pack the immediate next thing they do is look up the value
The fucking stupid morons do this, yes.
Your argument is that nothing in the world has value which is absolutely rediculous.
No, that isn't my argument. My argument is that the company making the cards monetarily values them all equally. For example, to Wizards of the Coast, an Alpha Black Lotus (sold for $3M) has the same value as a basic Swamp. And that value is basically just the cost to make the card (roughly 1-2 cents). The fact
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Again, everything you've said is just "Nothing in the world has any value at all."
If that is what you think, then you have no critical thinking skills and are, generally, too stupid to understand.
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You really think a market where you can perform an infinite amount of research before making a prediction is more gambling than buying a package that has a completely random chance of containing something of value??
Yeah that is quite different from sites where the majority of betting is on sporting, which no amount of research will turn it from a bet into an investment. Like, if its not primarily that sort of thing, then sure.
Btw I'm refering to Kalshi which has sports betting as 80% of its "volume". Poly
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Gambling arises from using a variable schedule of positive reinforcement based on the exchange of goods to derive a dopamine hit. Pokemon cards can be used as gambling, so can the stock market. The question is how it's being used. Someone who invests in the stock market long-term is not getting a dopamine hit from a variable schedule of positive reinforcement, so they're not gambling. Someone who plays Magic the Gathering at a gathering by buying boosters, then assembling a deck (a common play mode, both pl
So you want this (Score:3, Insightful)
I'm guessing most of the people who click on this thread already aren't fans of legalized internet gambling but I know there are some right wingers out here that will back anything the president is backing and the president's son is knee deep in all of these gambling companies so the president is backing it.
So put aside that for a moment. Let's talk about what widespread gambling is going to do.
You are going to have a shitload of young men brought up on the idea that luck is a skill that can be developed and that American exceptionalism means they must be skilled in everything or they are inferior human beings. This sets them up to gamble. A lot.
They will of course lose because that's how gambling works. The House always wins.
So congratulations you have a shitload of young men who are already broke as shit because there are no good entry-level jobs for them, and no working as a plumber at the entry level isn't a good job it pays about 15 to 20 an hour, and suddenly they are up to their eyeballs in debt from gambling.
This is going to create all sorts of problems for you personally. Many of those young men will work longer hours at their jobs and doing that reduces the value of Labor in the market reducing everybody's wages. Shit runs downhill and it's going to hit you just like it hits everybody else.
That's before we talk about the ones who get desperate and turn the crime of one kind or another. And yeah lock them up right? But you still have to pay your taxpayer dollars to keep them in that prison because you do not have the stones to execute somebody for sticking up a convenience store or doing some petty white collar crime like minor embezzlement.
What I'm saying is even if you think this is cool because freedoms and the president likes it it's going to bite you in the ass.
This is another classic chesterton's fence moment. Don't take down a fence unless you know why it was put up. In this case it's a little worse because we all know damn well why we limit gambling to one city in one state of the union.
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I always thought the problem with gambling wasn't necessarily that poor people waste their money on it (though some percentage certainly do), but that rich people waste their money on it. Rather than investing in things that generate genuine economic activity, you end up with wealthy people just playing a game of financial chicken against each other.
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I always thought the problem with gambling wasn't necessarily that poor people waste their money on it (though some percentage certainly do), but that rich people waste their money on it. Rather than investing in things that generate genuine economic activity, you end up with wealthy people just playing a game of financial chicken against each other.
Can't it be both?
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"we all know damn well why we limit gambling to one city in one state of the union."
Except we do not. Most states allow social casinos and many have a state lottery.
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..is pissed she ain't getting her cut. Plain and simple. This isn't about harming New Yorkers. This is about greasing palms.
That lying cunt is worried about gambling harm about as much as Las Vegas is. And she needs to be called out for it.
Is there something wrong with greasing palms or wanting a cut? Asking for a friend.
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Would this inefficient workaround be legal? (Score:1)
Set up two companies in a state or country where there are no legal issues. One says "invest in us, if [event] happens by [date], we will pay off more than you invest because company #2 will turn all their assets over to us" and the other says "invest in us, if [event] does not happen by [date], we will pay off more than you invest because company #1 will turn all of their assets over to us." Set up both companies to liquidate and return assets to stakeholders on [date].
Then list the companies on an excha
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The whole idea is stupid.
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Ha! I already bought all of that back in 1999 because Rush Limbaugh told me to.
Ignoring Laws is Ignoring Democracy (Score:2)
Wot? (Score:2)
I run a Roulette "prediction market" in my basement.
People can "predict" what number will fall and get money if they are right.