US Tries to Override New York Gambling Laws, Orders Kalshi to Keep Operating (arstechnica.com) 78
The CFTC has ordered Kalshi to keep operating in New York, claiming the state's lawsuit against the prediction market created a "market emergency." They said it acted "to ensure market stability" and "ordered the exchange to continue to operate in accordance with the Commodity Exchange Act's Core Principles." Ars Technica reports: The market emergency alleged by the CFTC is that New York Attorney General Letitia James sued Kalshi on July 31. James' lawsuit seeks a court order to permanently enjoin Kalshi "from operating an unlawful gambling business" in the state. The lawsuit also demands that Kalshi "make full restitution to customers who have engaged in betting" and pay financial penalties.
"New York intends to make event contract derivatives waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings," CFTC Chairman Michael Selig said yesterday. "Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws... New York has no business regulating these interstate financial markets. The commission is required by law to ensure order in these markets, and that is what we have done today." [...]
The CFTC says it alone has the power to regulate platforms such as Kalshi and Polymarket under the Commodity Exchange Act, a US law that gives the CFTC exclusive jurisdiction over designated contract markets (DCMs). "These are financial exchanges that offer financial instruments and operate across state lines," Selig said yesterday. "They match the bid from a resident of one state with the offer of a resident from another state and submit the trade to a clearinghouse that backstops the transactions of customers throughout the country."
"New York intends to make event contract derivatives waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings," CFTC Chairman Michael Selig said yesterday. "Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws... New York has no business regulating these interstate financial markets. The commission is required by law to ensure order in these markets, and that is what we have done today." [...]
The CFTC says it alone has the power to regulate platforms such as Kalshi and Polymarket under the Commodity Exchange Act, a US law that gives the CFTC exclusive jurisdiction over designated contract markets (DCMs). "These are financial exchanges that offer financial instruments and operate across state lines," Selig said yesterday. "They match the bid from a resident of one state with the offer of a resident from another state and submit the trade to a clearinghouse that backstops the transactions of customers throughout the country."
Emergency... (Score:5, Insightful)
Re: Emergency... (Score:1)
Yes. Yes! PLEASE DO THIS.
Re: Emergency... (Score:1)
The whole reason these came about to begin with was WIPO was penalizing the US for not allowing online gambling within its borders. That's part of a treaty obligation, so federal law is going to win here. Nothing NY does can change that, the best they can do is delay it.
Re: Emergency... (Score:5, Interesting)
The whole reason these came about to begin with was WIPO was penalizing the US for not allowing online gambling within its borders. That's part of a treaty obligation, so federal law is going to win here. Nothing NY does can change that, the best they can do is delay it.
You mean WTO? And we lost because *drumroll* we in fact allowed gambling online within our borders.
Nothing says we have to allow remote gambling or gambling but we did have exceptions carved out for fucking horse racing. Then we explicitly allowed those across states and online.
Mitch mutherfucking McConnell
https://www.bloodhorse.com/hor... [bloodhorse.com]
The treaty obligation does not change federal laws that leave gambling regulation to the states. The WTO was basically we allow it here we must allow it there. We didn't sign a treaty to allow gambling everywhere, and the U.S. doesn't have mandatory legalization of gambling, where ever in the fuck did you get the idea it did?
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This is New York we're talking about, though. They don't really want to stop the grift, they just want their cut of the action.
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Re: (Score:3, Interesting)
Re:Emergency... (Score:5, Informative)
Which is why all the insider trading sites have hired members of the Trump family to be very high level employees. Not quite C-suite, but basically employment for doing nothing. You know, like how China has CCP members at companies to say in the government's good graces.
Trump fucks kids (Score:2, Insightful)
Re: (Score:1)
We all know this is corruption and gambling.
"I'm shocked, shocked, to find that gambling is going on in here!"
Re: Trump fucks kids (Score:5, Informative)
Not sure I care about the gambling overall, but I do care they allow things like betting on wild fires; literally creating incentives for the creation of wildfires.
You need to care about the gambling (Score:5, Insightful)
Short-term crime will go up. Long term those young men will be organized into gestapos and secret police and pointed at you with guns.
Whatever else you think about ICE you need to realize that from Donald Trump's perspective they are his personal army at his beck and call. Now that is currently not true but there is work being done to fix that...
If you don't understand why that's a bad situation for you to be in I'm not sure what to tell you. But what I am trying to get across is that you can't just abandon large swaths of the population to be exploited. No matter how many guns you stockpile sooner or later you're going to run out of bullets before the world runs out of desperate people with nothing to lose.
Re: (Score:1)
Boomer all boomers are.
You're 20 years older than me. You keep trying to appeal to the youth, exactly like every bad communist and fascist dictator in history does, yet just like them, you're the old fart who has all of these grandiose ideas about how great an authoritarian government will be, how ending capitalism will save everyone from some nameless bad guys, only to kill everybody who merely disagrees with you.
Of do you think my kid has $350k lying around to cover tuition and their basic needs for 3 years of a program that has a 95% drop out rate among people who try working while doing it?
First, you're a moron if you spend more than $50k on college, and you have no business going to college at all becaus
Re: You need to care about the gambling (Score:4, Insightful)
Cool. So your solution to addiction is "I don't have a problem, therefore it's not a problem for anyone, anywhere."
See how well that works with any other addictive behavior, and the knock-on problems that come from these uncontrolled behaviors:
alcohol abuse
tobacco
cocaine
heroin
crack
meth
casino gambling
All of these things conclusively lead to higher crime rates [nih.gov].
Background
Severe problem gambling is most often related to income producing offences such as larceny and embezzlement. In addition, the high rate of relapse to gambling problems and the link between gambling debts and crime have clinical, forensic and penitentiary implications. Considering the data from the literature presented here I decided to form and empirically verify a hypothesis that incarcerated men with a diagnosis of pathological gambling are characterized by psychopathic personality disorders, alcohol problems and criminality.
Material/Methods
The groups of participants encompassed 90 men 26–52 years of age, serving a criminal sentence. All participants had to fulfil the following clinical criteria: a) be interviewed by a psychiatrist and diagnosed with pathological gambling and/or antisocial personality disorders b) obtain a result in the PCL-R test; c) estimate the relationship between gambling problems and crime. Taking into consideration the abovementioned criteria three patient test groups were formed: Group 1, which included those for whom gambling had led to crime; Group 2, where gambling was a part of a criminal lifestyle, and Group 3, in which the mutual relationship between gambling and crime was unclear.
Results
The participants were diagnosed as pathological gamblers (DSM-IV-TR, ICD-10) and psychopaths (PCL-R). Those tested differed with regard to the intensification of the personality disturbance tested, the co-occurrence of other disturbances, particularly psychoactive addictions, the motivations for taking up gambling, and the type of criminal activity.
Conclusions
The hypothesis was confirmed that incarcerated men with a diagnosis of pathological gambling are characterized by psychopathic personality disorders, alcohol problems and criminality.
The emotion you are feeling is "abject stupidity from rejecting decades of scientific and sociological evidence that you're wrong."
Re: (Score:2)
Cool. So your solution to addiction is "I don't have a problem, therefore it's not a problem for anyone, anywhere."
I never said nor implied that at all.
See how well that works with any other addictive behavior, and the knock-on problems that come from these uncontrolled behaviors:
alcohol abuse
tobacco
cocaine
heroin
crack
meth
casino gambling
What I am saying is we don't need a police state just to help you feel a false sense of security. His idea is to literally ban this outright. All of these things are going to happen whether you like it or not. That's just a fact. China literally implements the death penalty over this, yet it still happens there. So get over this authoritarian bullshit already.
Prohibition doesn't work, don't be a fucking moron.
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Not sure I care about the gambling overall
Do you care about drugs or alcohol abuse? Gambling addiction can quickly turn the wealthy into the desperate. Do you care about getting mugged, because gambling addiction has also been closely linked to homelessness and violent crime.
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Don't forget the incentives to fuck with medication approvals for a quick crypto buck.
The fed will fail (Score:5, Insightful)
Kalshi doesn't offer anything from anyone. It lots people gamble on outcomes of events. Nothing involved transfers from the originator to the 'winners' . Not an item, or a stock, or bond, or even currency, etc. this is sports gambling if the players were allowed to place bets on themselves. I hope it gets in front of a court after this idiot's presidential term and we get to work at not only undoing what damage we can, but implementing laws or amendments that make it harder to damage again.
STATE'S RIGHTS! STATE'S RIGHTS! (Score:5, Insightful)
OH WAIT! NOT THOSE STATE'S RIGHTS!
I'm so sick of hypocrisy just being embedded into every single god damned fucking thing our government does. To the point when something like this happens, most of us just shrug it off, because they've successfully flooded the zone so much, we're fucking drowning in it. We either have to be continually depressed over what an absolute dogshit pile of failure we are as a country, or we have to learn how to ignore it, the way people in big cities eventually learn you can't say hello to every person you see or you'll be exhausted just walking to work. And the worst part is, the best thing we can hope for at this point is that we swing to the other party at the midterms, so that we can watch them drag-ass and pretend to prosecute some of the worst offenses, and do absolutely nothing to fix any of the actual damage that's been done so that the dipshit brigade voting public that can't stand to pay attention to it except for like a week before the election goes, "Hmm. Seems bad now. Go back other way."
We need real solutions, not more foot dragging nonsense followed by hysterical (as in insane) levels of corruption, followed by more foot dragging, followed by still more hysterical levels of corruption. And it doesn't seem like anyone has any clue how to reach for actual solutions. Even Bernie is a skipping record of talking points that will never, can never be achieved. And people are starting to beat the communist drum every time someone dares say maybe affordability should be a priority again. Pure insanity at every level.
Re: STATE'S RIGHTS! STATE'S RIGHTS! (Score:3)
Re: STATE'S RIGHTS! STATE'S RIGHTS! (Score:4, Interesting)
Well on the upside the non MAGA nutjobs on the Republican side give Trump a net approval rating of zero right now, so a significant portion of them are likely not on that other side.
Re: STATE'S RIGHTS! STATE'S RIGHTS! (Score:4, Informative)
Lots of left leaning and non MAGA people own guns. They just don't make gun ownership their entire personality.
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Re: STATE'S RIGHTS! STATE'S RIGHTS! (Score:2)
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Re:STATE'S RIGHTS! STATE'S RIGHTS! (Score:5, Informative)
Congress did not pass a law giving them authority over this. The Trump administration routinely claims to have powers that the law doesn't give them, knowing most people will never look it up and will believe their false claims.
Here, I looked it up for you [cornell.edu]. This is how the law defines a "swap", which is what the CFTC has authority over. It's pretty dense and includes several different types of contracts, but here's the one that's relevant to Kalshi (emphasis added by me):
any agreement, contract, or transaction [...] that provides for any purchase, sale, payment, or delivery (other than a dividend on an equity security) that is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence
The part I marked in bold is critical. That's what distinguishes financial instruments from gambling. It must depend on something of financial, economic, or commercial consequence. If you buy an insurance policy that pays you if your house burns down, that's a swap. Your house burning down has financial consequence to you. If you bet on who will win a football game, that's not a swap. The football game has no financial consequence to you. It's pure gambling.
The problem for Kalshi is that they offer both types of contracts and don't distinguish between them, but the law does distinguish. Some of their contracts fall under the CFTC's authority, but a lot of them are firmly outside it. Those contracts are subject to state gambling laws that they blatantly ignore.
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Re-Inusrance would be a swap, primary insurance is very much regulated by states. Your interpretation would absolutely upend the insurance industry.
I would also not be so sure the administration is "wrong" here about CFTC authority. If we consider the down right radical determine the courts have embrace for a century regarding the commerce clause, if you read this clause in the same expansive way, just about anything does have commercial potential ... consequence. The word potential there can do a lot of w
The grift is now right out in the open (Score:5, Informative)
It's funny - Online discussions among (real) investors often worry about, and frequently caution each other about insider trading. The reality is, insider trading isn't applicable to the vast majority of us. Unless you're a C-level employee, specifically working in M&A, or maybe as the lead on a truly revolutionary new product (no, your company's Facebook wannabe or thinly disguised open source ripoff ain't it) - You have no insider information to trade on. Sincere belief that your employer's cool new toys are going to change the world ain't it - every company has cool new toys in the pipeline, and most of them are going to flop or at best be just another branded widget.
Thanks to Kalshi and Polymarket, congrats, every single one of us can now have truly actionable insider information. And that's not good, because as the past year has shown repeatedly, the average Joe is more than willing to use that information and has zero comprehension of securities regulations.
And to be clear, I have no substantial objection to gambling. This sham is something else entirely, however, and that something is a naked power grab.
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Congress doesn't matter. Trump is not allowed to be opposed and he has family members with financial interest you better protect, or you will be buried.
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One of two things must be true. He must have dirt on everyone or any opposition is scared of the MAGA cult. The only people who do speak out do so when their term is up or they're retiring.
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Third option: The same person/people who has influence over Trump also has influence over everyone else in the party. That being big donors and foreign powers, mostly.
But in terms of DC politics it's mostly fear of breaking ranks since that'll get you ostracized.
=Smidge=
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Must not actually say AIPAC/Israel though, I mean look at what happened to Albanese.
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Unless you're a C-level employee, specifically working in M&A, or maybe as the lead on a truly revolutionary new product (no, your company's Facebook wannabe or thinly disguised open source ripoff ain't it) - You have no insider information to trade on. Sincere belief that your employer's cool new toys are going to change the world ain't it - every company has cool new toys in the pipeline, and most of them are going to flop or at best be just another branded widget.
This is absolutely not true. There are plenty of people in the financial side of a business that have information that is material but non-public, and trading based on that knowledge is illegal, including sudden cuts in spending, audit results prior to publication, and more. HR will be aware of major layoffs. Facilities might be aware of impending site closures before they're announced. All these things can be used for insider trading.
Lower-level people aren't usually pursued because they're small enough to
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But this is Slashdot, not Investopedia. The "tl;dr" is, if you have actionable insider information, you're not merely guessing, you damned well know it and almost certainly signed an NDA specifi
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A lot of the things you listed there can be determined by watching the parking lot for a few days.
Which I have absolutely know investors to do. The bar to proving insider trading is as the parent suggested actually higher than most people expect.
That facilities guy if he got dragged into court, is going to argue that anyone living near by could tell you the number of Cintas and Granger trucks in and out lately made the situation clear to anyone watching. He is a facilities guy nobody tells him what the plan
Different priorities (Score:5, Interesting)
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I always wondered what was up with that. They used to have that big long message along I-90 about assessing tolls.
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Someone in this administration is making bank from Kalshi.
Donald Trump Jr. for one.
https://finance.yahoo.com/mark... [yahoo.com]
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> Someone in this administration is making bank from Kalshi.
Junior and other son.
Michael Selig (Score:5, Informative)
"Prior to his appointment to the CFTC, Selig was a corporate lawyer for cryptocurrency firms and prediction markets"
Re: (Score:3)
A lot like Ajit Pai running the FCC, he was an attorney for Verizon.
But but but... (Score:5, Informative)
Huh. I thought these guys were all about States Rights.
Apparently that only extends to telling women what they can do with their own bodies?
Re: (Score:2)
Huh. I thought these guys were all about States Rights.
Apparently that only extends to telling women what they can do with their own bodies?
Well ... Blanche assures anti-abortion supporters that Dobbs will be ‘permanent in every single state’ [politico.com]
Blanche lamented that the Trump administration’s efforts to restrict abortion are “taking longer than we want” but said the Justice Department was “working hand in hand” with federal health agencies and the White House “so that the Dobbs decision becomes permanent in every single state.”
“We don’t have complete victory yet, but we will have victory, and victory will be soon, and and and it will be permanent,” Blanche vowed.
Re: But but but... (Score:2)
These guys never cared about hypocrisy, they don't appear to feel shame and relish the idea that some liberal might be upset.
Under this administration (Score:4, Funny)
US ... Orders Kalshi to Keep Operating
Gambling is mandatory. /s
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Uber, AirBNB and "prediction markets" (Score:5, Insightful)
Uber, Lyft etc: No we are not a taxi company at all, we just help people that was going somewhere to take someone else along. Our service just by chance looks and functions as a taxi service, but no, regulations protecting customers or drivers do not apply to us ...
AirBNB: No, this is not an apartment hotel at all, it's just a service allowing people renting out their flat for a while when away (or buy several flats they never live in and drive up prices while dodging regulations)
"Prediction markets". Not gambling at all. It just ... well, that's just plain dumb. Same thing, new name.
Please stop.
Re:Uber, AirBNB and "prediction markets" (Score:5, Informative)
I'm not gambling, I am just trying to predict whether this slot machine will give me three cherries when I spin the wheel.
this is real tragedy (Score:2)
cftc *was* the financial regulator with the most integrity. Iâ(TM)m sure many good folks remain, and they are spending their income on trauma therapy.
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This is true. So if gambling must be regulated at the national level (due to its on-line nature), the CFTC is as good a place to put it as any. But the whole "keep running or there will be a market emergency" is just pure bullshit. What product or service that we can't do without will be lost should Kalshi be shut down?
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They're committed to the bit that Kalshi and company are futures exchanges. If New York decided to shut down one of the stock, foreign currency, or commodity exchanges headquartered there it would actually cause a market emergency. If you want to pretend that Kalshi is one of those then you've got to pretend it with feeling.
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Somewhere, the ghost of Bugsy Siegel is saying, "Hey! Guys! Remember me?"
Using "US" as a subject (Score:1)
It's always so disheartening to read that "The Department of Justice" did this, or "Health and Human Services' did this other deranged thing, only to realize that our normally boring government agencies are currently part of the Trump administration.
Next Stop: SCOTUS (Score:5, Informative)
The Third Circuit court ruled that CFTC has jurisdiction.
Southern District of New York (Judge Analisa Torres, July 2026): Denied Kalshi’s request for a preliminary injunction. Held that the CEA does not preempt New York’s gambling laws as applied to Kalshi’s sports event contracts.
District of Maryland, ditto
District of Arizona, ditto
District of Nevada, ditto
District of Utah, summary judgment allowing Utah to apply its anti-gambling laws
One Sixth Circuit decision also went against Kalshi on related issues
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Exactly which commodity or asset is being represented by Kalshi? The Commodities Exchange Act was passed to prevent manipulation of commodity and asset markets and prices. And led to the creation of the CFTC. So, what underlying asset market is at risk here? Certainly nothing that by itself could be traded in a market (elections, wars, sporting events, etc.)
I think the Third Circuit Court is wrong.
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It's not a remotely level playing field. One soldier who took part in the Venezuela raid basically had orders in hand when he placed multiple bets on the timing of the raid, netting a ton of money. There have been many other examples of inside information being used to stack the odds.
Just tax them into oblivion. (Score:3)
Then they will complain it is an unfair tax, appeal that to the supreme court and try to have it legally changed to gambling.
It is gambling, and crooked gambling at that since the gambler can affect the outcome of the bet by, you know, killing people or blowing things up - which you shouldn't be legally allowed to gamble on in the first place.
Re: (Score:2)
I like your style. Then use the taxes on progressive legislation.
Grifting at the top level (Score:4, Insightful)
This is Grifting at its best. It will decades if ever we get rid of the "new" carpetbaggers that have ridden on the coat-tails of Trumplstiltskin.
Orders to keep operating? (Score:3)
That seems inappropriate.
Certainly the feds should assert their legal supremacy if they truly believe federal law covers the activity. It would be reasonably for them petition the state court to stay any orders requiring a business to cease operation while Feds seek to settle who the regulatory authority lays with.
However outside of defense production like situations I don't think federal government should be ordering anyone to operate anything. Clearing the way for the do so sure, but if say Kalshi simply does not want to deal with NY and NY customers until matter is settled they should be entirely free to simply exit the state.
blunder (Score:2)
Remember when they screamed "states rights"? (Score:2)
Law in unintended consequences (Score:2)
why (Score:2)
Why doesn't NY apply its gambling laws to Wall Street?