There’s a reason both Kalshi and Polymarket were quick to make political connections (aka pay bribes). They know what they are doing is illegal, and waiting for legislation like sports betting apps did would take too long. So they bought get out of jail free cards instead.

> They know what they are doing is illegal

This is a bad take. What they are doing is quite obviously legal right now. Federal law trumps state law and the feds have an opinion, despite being weird and controversial.

There are a number of ongoing legal battles about the federal laws but until they work their way through the courts, it's "legal". Also, it could all get resolved with a new presidential administration in two years. This is the correct solution.

We shouldn't cheer for personal prosecutions over definitionally legal activity. Nothing good will come of it. See also: Sending mifepristone across state lines, or traveling out of state for abortions.

"What they are doing is quite obviously legal right now. Federal law trumps state law and the feds have an opinion..."

Federal law does not categorically trump state law.

https://en.wikipedia.org/wiki/Federal_preemption

Whether pre-emption applies in this case depends on whether the courts accept Kalshi/Polymarket's claim that they operate a futures trading platform, not a gambling platform. If and only if that claim is accepted, is there a pre-emption argument, and only then would the opinion of the Commodity Futures Trading Commission be relevant.

Trump's family being on the board is alarming for another reason. There are several markets about the president's actions that often involve missiles.

These venues do not have enough liquidity to attract Trump and his cronies. There might be people lower down the food chain who are taking advantage though.

Don Jr made bets on these same sites, as did so many WH personnel.

If the goal is to profit off of bombing other countries, why do you need Kalshi?

If you have advance knowledge of an attack, there are much less conspicuous ways to profit off that.

Nothing this administration does is subtle, inconspicuous or thought out.

> there are much less conspicuous ways to profit

What about this administration makes you think that's important to them?

What's the less conspicuous way? Oil futures are more conspicuous. Though I'll bet he's doing that for someone less directly connected.

These people are seasoned grifters. They don't look for one big winning ticket, but rather multiple streams. A million here, a million there, pretty soon you're talking real money. For your rank-and-file workers that's serious.

Who cares about being conspicuous anymore? The president openly takes crypto bribes...

"can't be brazen corruption because it's too obviously brazen corruption"

It's just another avenue for grift. In corrupt governments, the people up top ration out minor grifts to subordinates to keep them loyal.

When will we start holding the people who found and operate companies whose sole purpose is to break the law accountable, rather than letting them hide behind "limited liability"?

These founders should be in prison for promoting illegal gambling. Same federal charges mafiosos get caught on for a "friendly card game".

> When will we start holding the people who found and operate companies whose sole purpose is to break the law accountable

You don’t even have to read the article, the headline says it all…

I dunno it sure seems to have worked for Uber and AirBnB…

I would amend your “breaking the law” comment to “willfully ignoring all regulation, taxes, and labor provisions” perhaps but, same sentiment.

This is the old, "Easier to ask for forgiveness than to ask for permission"

A lot of these companies have taken this approach. Break laws until someone finally notices AND does something about it. The runway to a slap on the wrist is often times more financially beneficial to companies - there is no incentive to stop if you run a billion dollar company and breaking the law gets you a $50M dollar fine you make back in a single month.

I thought SOX (Sarbanes–Oxley Act) was supposed to prevent a lot of this, but I guess companies just continue to find loopholes to exploit.

I think sometimes people need a visceral demonstration of what bad laws are actually preventing. Uber was a pareto improvement in my view: we are in a better world both for consumers & for low-income wages having ridesharing as a backstop.

On the other hand, I've come around to the view that sports betting is a net unqualified bad -- and I didn't necessarily feel that way before the Kalshi/PM explosion.

What behavior from Airbnb do you think compares in criminality to running an online bookie?

If it is not gambling then it amounts to an unregulated futures market, which is also illegal. There is no way around this for Kalshi/Polymarket, they have broken the law and the only question is which law was broken.

Right, but the point is that we don't just go from popular outrage about a shady business model to "straight to prison". The courts have to untangle the legalities of the shady business model before we can even determine what the charges would be. And that's what they're doing.

? But Kalshi is regulated by the CFTC

The federal government has claimed Kalshi is a regulated futures market.

https://www.cftc.gov/PressRoom/PressReleases/9281-26

That is the federal government asserting that Kalshi is subject to federal regulation by the CFTC and not state regulation. It is not an assertion that Kalshi is actually in compliance with futures market regulations, nor is it an assertion that the contracts offered by Kalshi are actually legal (there are explicitly illegal futures contracts).

Why is betting on risky 0DTE stock options legal in Utah but sports not legal?

Why are casinos operated by Native Americans legal but casinos operated by black people illegal?

I don't think "illegal gambling" is illegal for the reasons you want it to be illegal.

This would be a great post for Kalshi's lawyers to make. Hard to believe it though. To be clear it is a not a fundamental proposition of the legal system that every illegal activity be tested before it "actually" becomes illegal. It is a business' obligation to not violate the law, not the other way around.

I think I understand the basics of business and business law in the US. It is disgusting how easy it is to hide behind a corporation or LLC to avoid criminal charges and civil liability.

I'm not sure specifically about the moral crusade against Kalshi and Polymarket, but I am glad to see that at least one state is serious about its sovereignty and is willing to go to the mat with criminal charges. Utah 100% has a right to enforce this and I hope they are successful. And taking on the feds too, that is a gutsy move.

We need at least one state to do this when large corporations violate privacy laws.

Not sure - to the extent to which Kalshi is a nationwide futures market, it is hard to imagine a more clear "interstate commerce" example. Congress should probably just pass a law delegating regulation of "sports futures" to the states to remove any legal ambiguity. Sports gambling is obviously pretty net bad for young men.

Wonder how proxies/VPNs play into this, since Utah was recently in the news about an age verification law that basically said you're liable if anyone physically in Utah accesses a restricted site.

Just the day I saw a post in the Guardian referring to these things as prediction markets. It's so outrageous and undeserved

> Let's confirm you are human

Closes tab.

i feel like there's some provable equivalency between gambling and pyramid schemes

the equivalency is both go bankrupt if people win as much as the house wants you to think they win

Prediction markets' business model is taking transaction fees from contracts between independent counterparties. Kalshi won't go bankrupt no matter how much you make there (though 'people' collectively will make negative [fees + taxes]).

I’m not sure what you mean.

A pyramid scheme uses new investor money to pay fake returns to those who have already invested.

A casino provides games to bet on where expected value for the player is negative. A sportsbook balances their book by modifying the odds to remain as neutral as possible and capture the spread (see ‘vig’).

There’s not a whole lot of similarity there.

Probably referring to online gambling specifically. And I would frame it as the folks who promote pyramid schemes are the same as those who promote online gambling.

not really

Now do video game lootboxes.

kalshi and polymarket are quite obvious gambling sites. any pedantic arguments to the contrary are strictly financial chaff to enhance their operating margins until the regulations finally catch up.

they were never an innovating marketing play... it was the culmination of a gambling company committing to regulatory capture as evinced by Donald Trump Jr (totally not) sitting on BOTH BOARDS as a "paid strategic advisor" or whatever lie they want to spin.

I don’t see the clear difference between something like Kalshi and, say, Robinhood. I do see a clear difference between Kalshi and casinos or sports gambling sites like Fan Duel; in the latter, your counterparty is the institution itself. This creates a lot of perverse incentives on the part of sports gambling sites to maintain their edge, such as banning bettors that are too good at playing the odds. Kalshi, on the other hand, is never your counterparty in any transaction.

Now, Robinhood is a brokerage, regulated by FINRA, and has been fined for misbehavior in the past. So I am more than willing to believe that there is daylight here that I’m not seeing. But anything that lets you speculate attracts a certain clientele, and I think the most important distinction is whether or not the platform itself is an interested party.

If Kalshi is not a gambling operation then it is an unregulated futures market, which is still illegal. There are perverse incentives in futures markets too, which is why they are regulated.

Also speculators serve an important purpose: hedging strategies require speculators on the other side. It is not just a "certain clientele," there are people who run profitable businesses on speculation (it amounts to collecting insurance premiums from people who want hedges).

You're posting this all over the site but Kalshi is very clearly a licensed futures market regulated by the CFTC

How is that at all clear? They are likely subject to CFTC regulations but there are a lot of questions about whether or not they are in compliance.

Describing an organization with a license from a CFTC as an "unregulated futures market" is just flat wrong, I'm not really sure why you're motte-baileying here.

If the differentiating factor is just who you’re betting against, how are Kalshi et al any different from online poker? It’s still gambling, the house just takes a rake

Because you can easily collude and cheat at poker so it needs to be heavily regulated or outright illegal to prevent theft. You can't really cheat at prediction markets, unless you have insider information which they can litigate after the fact.

Surely you’re being facetious, insider trading is obviously a huge problem that is rarely enforced and we’ve already seen instances of people actively influencing events or using false information to fake the result of a bet

> You can't really cheat at prediction markets

Lots of folks gripe about how Kalshi adjudicates contracts.

Robinhood is regulated under the SEC and other regulatory bodies and keeps "paper trails" of the trades.

and Kalshi is regulated on the CFTC as it is not an securities market that the SEC regulates.

Besides the brokerage being regulated, stock markets are regulated.

That's such a poor argument. Illegal building is bad because it's illegal; illegal gambling is bad because it's illegal. This is just how laws work. Heck, in the US even homicide is bad because it's illegal, when you consider that there is a legal version of it.

There are very good reasons that gambling and financial markets are regulated.

Yep. Hope they kill Kalshi.

It's really the worst of both combined. There is ample gambling like options and behavior on Kalshi

&&

policy makers, assistants, journalists, and the like are insider trading - and the president of the united states is intentionally market manipulating for profit

There are ads on the DC Metro right now that advertise one of these as a source of truth for election polling. The poster says something like "98% accuracy" and in super fine print, specifies something like "within 2 hours of polls closing" and other normal fine print stuff.

To me it's absolutely crazy that the "gamble on anything" apps are being advertised as some kind of polling software. I've already seen at least one race called into question because the gamblers bet on the wrong pony.

They're pure corruption engines designed for insider betting. The top brass of these companies need to be made example of.

this is an answerable question and these markets are generally well calibrated (including on election outcomes), they have a good brier score.

i would not premise an anti-prediction market argument on their accuracy being bad, you are building on shaky foundations. the better argument is the paternalist protecting stupid people from themselves imo.

> They're pure corruption engines designed for insider betting. The top brass of these companies need to be made example of.

is there any surprise then that Trumps are on the boards of both?

The LDS church (The Church of Jesus Christ of Latter Day Saints), which is also based in Utah has provided explicit guidance against participation in Kalshi and Polymarket as gambling.

Here is their official stance on gambling: https://www.churchofjesuschrist.org/study/manual/gospel-topi...

I am not sure how much, if any, impact or influence this has had on Utah law.

I thought it worth posting the stance for those not willing to click

... Gambling is motivated by a desire to get something for nothing. This desire is spiritually destructive. It leads participants away from the Savior’s teachings of love and service and toward the selfishness of the adversary. It undermines the virtues of work and thrift and the desire to give honest effort in all we do.

Those who participate in gambling soon discover the deception in the idea that they can give little or nothing and receive something of value in return. They find that they give up large amounts of money, their own honor, and the respect of family members and friends. Deceived and addicted, they often gamble with funds they should use for other purposes, such as meeting the basic needs of their families. Gamblers sometimes become so enslaved and so desperate to pay gambling debts that they turn to stealing, giving up their own good name.

They absolutely have been the main force behind the timing of this push. It was the main topic of General Conference a few weeks ago and one of the most eyebrow-raising articulations of official church policy.

Given the way that the church has explicitly encouraged state legislators to shoot down recent laws it's not surprising to think they'd be pushing for this.

To be clear, it was one talk out of ~30, not the main topic. But the talk (https://www.churchofjesuschrist.org/study/general-conference...) was unusually direct and stood out among the more common, often repeated topics like faith, temples, etc.

> Given the way that the church has explicitly encouraged state legislators to shoot down recent laws it's not surprising to think they'd be pushing for this.

And the way they've influenced voters in Idaho and Arizona recently.

Also "Utah is one of only two states where gambling is also prohibited under the state constitution"

Funnily enough, Hawaii is the other one. Three more states also do not have lotteries.

Washington State constitution, article 2, section 24 originally banned lotteries too:

https://leg.wa.gov/state-laws-and-rules/washington-state-con...

>SECTION 24. LOTTERIES AND DIVORCE

>The legislature shall never grant any divorce. Lotteries shall be prohibited except as specifically authorized upon the affirmative vote of sixty percent of the members of each house of the legislature or, notwithstanding any other provision of this Constitution, by referendum or initiative approved by a sixty percent affirmative vote of the electors voting thereon. [AMENDMENT 56, 1971 Senate Joint Resolution No. 5, p 1828. Approved November 7, 1972.]

>NOTES: Original text — Art. 2 Section 24 LOTTERIES AND DIVORCE — The legislature shall never authorize any lottery or grant any divorce.

Hm, I could get behind that in California

You get organized crime fillin.

Ehh I wouldn't try to appeal too much to what the LDS church thinks about this. They require members to give 10% of their annual income to the church, while already having close to $300 billion in the bank.

Everyone knows the state of Utah is largely run by the church.

> Everyone knows the state of Utah is largely run by the church.

Surprisingly few people know this ime. It's worth pointing out as one of the few areas [0] where the church has as much pull as its members think it does.

While I wouldn't look to the church as a bastion of morality for So Many Reasons, it's worth looking at a hard example of how it is able to manipulate politics in Utah, and by extension nationwide.

[0] Other areas worth being aware of are Idaho and parts of Arizona of course.

If the state of utah is run by the church, then presumably if the church wants to ban kalshi, it's going to matter.

The point isn't to appeal, right? Just speculate on whether the church is the reason for this.

A week ago if you dared to say anything critical of polymarket you would be drowned out in replies talking about the "wonderful societal benefits" of gambling on daily life and how it "informs decision making" and helps the "common people".

you must be from an alternate timeline

51% or more of social media is automated.

Bots Rule Everything Around Me BREAM dollar dollar bill yall.

like, of course the gambling halls drop big money on online marketing

The genie's way out of the bottle with sports betting. Nonstop ads, branding tie-ins, billboards, podcast ads, on and on.

And it's terrible and going to destroy sports.

We don't need more financial incentive to influence the outcome of elections, there's already enough as it is.

> I liked it for political races as an alternative to polls.

With enough funds, smaller political races can be gamed.

Yeah that too, so only the big ones. Obviously the law can't distinguish since it's all the same kind of gambling.

What in the revisionist history? Polymarket has been getting shit on here since it debuted.

Not really. I can recall countless threads where everyone said that this improves information availability. Do you want me to go through my post history to find them?

As much as I am a fan of being able to see the current probability of a future event by checking prediction markets - the argument that there is a meaningful difference between predicting the outcome of a sports game and betting on the outcome of a sports game strains credulity.

The whole “we provide the most accurate way to predict the future” upside-as-a-counterweight-to-the-downside-of-gambling has always seemed like a hollow benefit to me. I mean, like, okay, let’s say they actually do provide that. Who’s to say that’s a beneficial result? Are we really better off having more accurate forecasting of election results? Or does that just improve boogeyman MBA-types’ abilities to affect election results?

That’s not what prediction markets give you though. They give you capital-adjusted, human perception-based odds of future events. You aren’t “seeing the probably of future events”.

> An event predicted to happen p% of the time happens about p% of the time. Can’t beat that.

https://marginalrevolution.com/marginalrevolution/2026/10/pr...

You can link me studies that are paid and bought for by these companies all day long. Find me one where the guy is not a consultant to the companies themselves.

Huh, I hadn't considered that. Have you seen research from other sources that demonstrate they are not accurate?

This is the only one I’m personally aware of, keying off of a commonly known bias humans suffer from: https://arxiv.org/abs/2609.12878

Obviously not compelling on its own though.

> longshots lose 6.3 cents per dollar when each contract is weighted equally but gain 4.1 cents when related contracts are first grouped by parent event; the two-sided pattern is robust in Crypto and Politics but surprisingly absent in Sports.

This seems like a relatively small inefficiency in the markets, no? If the margin of error notable in a prediction markets is <10 cents per dollar, that implies that they are pricing events pretty accurately. Especially post publication of this paper, when sophisticated traders could trade away this inefficiency.

Especially since what Kalshi is doing has existed for 25 years in Europe (we call it betting exchange) and been licenced as sports betting. It is nothing new other than them doing it without licence and that they are more generous in accepting weird market types.

Personally I’m a fan of the non sports side of these apps, Polymarket in particular. They are putting a financial incentive behind accurately predicting the future, which makes these apps basically the most accurate predictor of the future. Available to anyone to view, for free.

It makes sense why they went towards sports gambling, because the market is so big.

I think this is kind of a naive take. There's a reason why you can't take a license insurance policy out on a stranger. Being able to bet that there will be a wild fire or if a plane will be late creates terrible incentives. It's also a new way to do insider trading.

Most uncertain things that people need to hedge (currency, commodity prices) already had a hedge.

In practical terms can someone really give me an example of how they benefited from knowing the future (materially, not emotionally) from a prediction they got from Kalshi? I am honestly curious.

It is a naive take, and the take that has been most propagandized by these companies.

The only one I can think of is, having a better idea of which way the presidential election goes might've been useful for some people, or some other large election. There's a lot of egg on the faces of all these mainstream media polls, which still continues to trigger some people.

So what happens when someone like musk spends a few hundred million to skew what the probability looks like? Suddenly people see that a politician has a 90% chance of winning, and they feel silly voting for the operation?

These are not polling places, they are places for capital to influence odds.

Eh, sounds like the excuse I kept hearing as to why Trump had favorable odds in the last election. Supposedly a foreigner trying to influence our elections, totally not the Democrats kinda not having a candidate. It would be a very expensive (on average) way to probably not make a difference. Cheaper to just buy up some media companies, which do the same thing, saying their preferred candidate is going to win.

Small elections are susceptible to corruption this way, though.

There’s been plenty of blatant voter interference, and billions spent influencing American voters, not really seeing where your point is based. More handles to steer democracy with money is not better, period.

Why not both?

> They are putting a financial incentive behind accurately predicting the future,

Unfortunately they also place a larger financial inventive on influencing the outcome of future events. Or incentivizing corruption within the inner circles of these events. Because the larger financial upside in these transactions is to bet against what the market thinks, and influence the outcome.

I don't think that is logically correct. Commonly perceived probability has been proven frequently wrong whether naturally or due to manipulation. The reasoning here is not exactly the same, but closely aligns to bandwagon fallacy.

It would be interesting to see how frequently Polymarket predictions bet against the most common prediction and by what margins.

It's the least inaccurate way. There's money to be made if you're sure you have a better way. The real problem is we're already seeing these markets influence the outcome.

You make two valid points, but they still do not qualify the validity of these markets as accurate predictors. There is a difference when people, like Berkshire Hathaway really dig into the financials and management of a company to predict its future versus somebody like me who just money on a stock. In one case an investor seeks to make money and actively influence an outcome, but in my case I am just dropping money and hoping it out paces the rise of inflation because banks are no longer reliable stores of financial security.

Polymarket projections do not provide investigative insight, as in the Berkshire Hathaway example. It's just gambling. Any influence drawn from these predictions is incidental and reactive, as opposed to active market forces like buying/selling.

Nobody is saying it's better than stock market predictions of assets and company financials. Though there are some asset price predictions on there that exactly match the traditional markets, so it's no worse.

The range of activities in which this effect can be harnessed for societal good is extremely narrow, but I think it's there.

I'd be in favor of a prediction market for which which asteroids are likely to collide with something, and when. Though we'll have to shut it down once it becomes feasible that somebody might go up and nudge one.

> They are putting a financial incentive behind accurately predicting the future, which makes these apps basically the most accurate predictor of the future.

There is plenty of data that shows they actually don't work very well outside of surfacing insider knowledge (which the commercial prediction markets superficially pretend to be against).

For events where you can't have full picture insider knowledge like elections, prediction markets are pretty awful at accurate predictions.

Or they're creating a financial incentive for insider trading and manipulating certain events.

I mean look at all the oil market manipulation in the Iran war. The pattern was repeated so many times: short oil, announce a ceasefire deal with imminent on Sunday before the markets open, cash out on Monday, rinse and repeat.

The argument is that we get transparency on what's likely to happen. I don't think there's any evidence of this. I've seen any number of very poor predictions coming from Kalshi and Polymarket. I have also seen some clear manipulation.

We should call this what this is: gambling.

> They are putting a financial incentive behind accurately predicting the future, which makes these apps basically the most accurate predictor of the future.

This is so fallacious. Putting money behind something doesn't make a prediction of a non-knowable more accurate.

Tarot card readings by a psychic must be more accurate predictor than a tarot card reading by an amateur because professional tarot card readers have a financial incentive to be right, so people continue coming back to them for advice. Getting a tarot card reading therefore makes this basically most accurate predictor!!

> They are putting a financial incentive behind accurately predicting the future, which makes these apps basically the most accurate predictor of the future. Available to anyone to view, for free.

Here, let me predict a future where someone will die. On the other side, let me pay for a hit on the same person. /s

^It's a bit extreme and exaggerated, but it's like that on purpose to make a point.

markets on people dying are not allowed for this exact reason

This is outrageous! They're tech founders! Penny-ante things like "the law" don't apply to them!

Somebody needs to tell Utah it needs to change its laws to adapt to their business plan, ASAP.

Creating a company with the intent to circumvent the law is definitely something that should be punishable with stricter measures than simply breaking the law directly.

States have the right to enforce gambling laws, even if the defendant calls it something else.

They allegedly knowingly broke state law, how can state law exist if it was just always going to be overruled by federal jurisdiction?

Yeah thats what drug traffickers who are also facing murder charges say...

They're being threatened with prion time because they broke state law. That the federal government is looking one way while states another is not the cause of the jail time threat.

> prion time

In addition to being utterly terrifying, this would fall afoul of the "cruel and unusual punishments" thing /s

(What a typo)

They should be thrown in prison for knowingly violating a law. Trying to play a semantics game (prediction market vs gambling) to get out of it is just scummy. Everybody knows it is gambling.