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
Incredible that it's taken this long to arrive at the obvious.
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
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.
I call $50 on Tails!
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.
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.
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?
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”.
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.
"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.
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.
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.
gacha mechanics
Binance, FTX, BitMex, Silk Road founders all went to jail - it’s a huge coin flip.
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.
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
we're essentially one year of three into one of the least effective lame duck legislative bodies we'll ever see
I'm sorry, Lloyd's will _what_??
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.
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.
BitMex didn't go to jail, they all got probation/ankle tag, for not running a clean money org (allegedly no KYC, registering US accounts from offshore, etc.). CZ got caught in the US anti-China panic that also saw the TikTok ban pass Congress with nearly 80(!) votes in the Senate. Silk Road: drug trafficking.
FTX is the closest analog, but by all accounts they did not run a clean operation. What I have read of their operation would have been grounds for charging even if they were trading legal securities.
Seems the through line is if your main business is illegal, you need to run it as if it were going to be legalized tomorrow.
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.
That said, I recognize the broader point. Betting on everything, especially things that betters can directly influence is incredibly dangerous.
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.
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.
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.
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)
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.
You could live in Germany or France if you prefer a legal system more ruled by clear statute?
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.
Today at the gas station on the outside of the pump and the store door.
Unlike sports gambling or casinos, the stock market actually does have some legitimate utility, as compared to being (at best) pure entertainment.
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.
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,
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.
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!)
We clearly don't live in the same states.
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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I live in a different country since we don't have states here.