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Comment by dannyw | Hacker News Reader

Yes. If you take Kalshi out of it, that’s exactly how the law is supposed to work.

The State of New York does not have the power to compel NYSE to stop operating in New York either, irrespective of what laws NY passed, as that is with the SEC.

They also can’t enforce a law saying companies in New York must file 10Qs every month or something. Again, federal.

See: supremacy clause, interstate commerce. (The latter has been significantly expanded beyond its ordinary meaning for centuries; in here, the theory is that New Yorkers not being able to participate in a market ‘hurts’ other interstate market participants).

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It's kind of hard to take Kalshi out of this, since the whole premise for the Commodity Futures Trading Commission's authority here is that Kalshi is a commodity futures trading exchange, not a gambling site.

When can I take delivery of my 2026 NBA Knicks team, that I purchased through the commodity futures market? I'm available Friday.

I think the gp just means, “if we put aside that this is a contentious company.”

I’m not sure that interstate commerce should apply here—it seems correct that a state can ban gambling, even if it is on the Internet against out-of-state US nationals—but if the CFTC is asserting its pre-emption under existing law, it needs to assert it (as it is doing so here.)

It’s pretty clear that this is (a) gambling and (b) explicitly excluded from the CFTC’s legal mandate (“gaming”), but obviously this is about corruption and not a good faith interpretation.

I expect this to go to the Supreme Court and for the Court to side with the corruption.

If Wickard v Filburn is still good law, I don’t understand how the betting market is anything but interstate commerce. Futures trading is betting, especially where they’re settled in cash.

States have been individually regulating gambling within their borders since they were English colonies. No one interpreted it as interstate commerce until PASPA in 1992, which was gutted by Murphy.

Everyone points to the gaming exemption, but is that not supposed to cover, well, games - the classic casino table games like blackjack, poker, craps, roulette, etc? I don't really see how horse or sports betting is gaming.

Maybe an "event outcome prediction contract" simply ought not to be considered a "commodity" under any consistent interpretation of the law and the English fucking language.

I think it should be well defined. I personally think prediction markets for say, federal and state elections, are a net benefit.

It provides another source off information, and there’s much less insider trading risk.

“”Event outcome prediction contracts”” on sports, clinical trials, is late stage capitalism, and yes, bullshit.

I think the point is more "why is the outcome of an event like an election considered a commodity" and not a question of the value of event contracts?

Like, why would the same agency regulating wheat futures also be responsible for regulating event contracts? I know the simple answer is that Congress said they should be, but conceptually it's a bit odd.

>It provides another source off information, and there’s much less insider trading risk.

You see another source of information. I see another point of potential corruption. Statistics is already hard enough to do right without the extremely perverse incentives that gambling brings.

That said, gambling is still legal. Put it under its proper regulations and there's not really much I can say against it. Unless there is in fact regulations around gambling with election races.

It falls out of regulating OTC swaps as commodities derivatives, even when they are not actually derivative of a commodity (e.g. forex swaps or credit default swaps). If whether a set of bonds defaults by a certain date is a commodity, then any factual proposition is also a commodity if someone constructs a swap around it.

The interstate commerce clause is hilarious. It's the ultimate freebie for the feds. They can argue their case for pretty much anything they want with it.

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