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points by paxy 5 days ago | 0 comments

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.

[–] jansport123 5 days ago

trump crime family is trying to make out like a bandit before times up.

[–] bagacrap 5 days ago

POTUS can't pardon state convictions. This will be decided in courts. One perspective is that US taxpayer is paying kalshi's legal bills, but still the final outcome is not within Trump's ability to change.

[–] paxy 4 days ago

This POTUS in particular can do whatever he wants.

[–] mahboi 5 days ago

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.

[–] Paradigma11 5 days ago

If I were Iran I would regularly put up 10 million or more on bets that the US wont attack Iran the next day and if somebody takes up the bet you know you are on.

[–] mahboi 4 days ago

The markets for that already have decent amount of volume and liquidity, could just watch them

[–] pnw 5 days ago

If you are referring to Polymarket, it's an advisory board, not a board of directors. Big difference.

[–] zbentley 5 days ago

That does very little to diminish the incredibly suspicious nature of having the family members of a notoriously corrupt president on the board of a dubiously-legal-at-best company whose product is a platform for betting on major world events.

[–] mahboi 5 days ago

I know those two are different things, but both have the same problem here. What point are you making?

[–] paxy 5 days ago

There’s no difference because the point isn’t to take advice. The position is an excuse to award shares.

[–] pnw 5 days ago

Why do they need an excuse to award shares? The fund he is part of has apparently invested over $500m in Polymarket.

[–] mahboi 5 days ago

Ok so he's a paid advisor and heavily invested in it.

[–] cj 5 days ago

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.

[–] freejazz 5 days ago

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

[–] jayd16 5 days ago

In fact, open corruption is preferred because it creates a co-dependence to prop up the system. It puts you under then thumb of the administration because they can decide to enforce the law at any time.

[–] jakeydus 4 days ago

Keep the rats in line by threatening to sink the ship, so to speak.

[–] cdrnsf 5 days ago

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

[–] mahboi 5 days ago

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

[–] whateveracct 5 days ago

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

[–] ceejayoz 5 days ago

> there are much less conspicuous ways to profit

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

[–] jayd16 5 days ago

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

[–] Terr_ 5 days ago

It's shocking that 10 years in people are still falling for the "it can't be X, because X would be too obvious and stupid" trap when it comes to Trump-land.

[–] bryanrasmussen 5 days ago

as well as all the other points everyone else made, less conspicuous ways to profit may also have upper bounds, even if a prediction market has upper bounds two sources of profit will probably allow you to profit more than one.

it is true that a smart operator may like to profit only in the less conspicuous way, but what would cause you to think that applied to Trump and his family?

[–] TrackerFF 5 days ago

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.

[–] paxy 5 days ago

Like what?

[–] in_ab 5 days ago

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.

[–] fakedang 5 days ago

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

[–] dghlsakjg 5 days ago

Donald Trump Jr. is a paid advisor and investor to Kalshi and Polymarket. Why bother betting if they will just give you cash for having the right name.

Granted, the son whose wedding you skip has got to be lower down the food chain.

[–] stickfigure 5 days ago

> 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.

[–] bwestergard 5 days ago

"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.

[–] stickfigure 5 days ago

And while that is winding through the legal system, courts have decided that Kalshi/Polymarket can continue to operate. That might change in the future, but it is the present reality.

As long as the business is legal to operate, there is no justification for criminally prosecuting the people engaged in that business.

[–] bwestergard 5 days ago

That courts have not ordered them to stop operating does not mean that what they are doing is legal. They could face additional counts for their behavior while the case is pending.

"As long as the business is legal to operate, there is no justification for criminally prosecuting the people engaged in that business."

You are begging the question: assuming that the business is legal to operate in the state of Utah. You keep presenting Kalshi's arguments as though they enjoy some presumption of legality prior to a ruling.

[–] lesuorac 5 days ago

It's a criminal case, don't they have a presumption of legality then?

[–] Dylan16807 5 days ago

Presumption of legality pending trial is rather different from "quite obviously legal[emphasis in original]" or "definitionally legal".

"until they work their way through the courts, it's "legal"" is a much better phrasing and if the comment had stuck to that it probably wouldn't be downvoted.

[–] ceejayoz 5 days ago

> What they are doing is quite obviously legal right now. Federal law trumps state law…

No. There's no "states must permit gambling" Federal law for state bans to conflict with currently; states are free to ban it.

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

"While gambling is legal under U.S. federal law, there are significant restrictions pertaining to interstate and online gambling, as each state is free to regulate or prohibit the practice within its borders."

[–] cogman10 5 days ago

While I know of a few cases where federal law can force a state to have looser restrictions (for example, the second amendment), it's pretty uncommon. Usually if a state wants to ban something, it can ban it and federal law can't stop such a ban without a pretty strong constitutional justification.

[–] ceejayoz 5 days ago

> While I know of a few cases where federal law can force a state to have looser restrictions (for example, the second amendment)…

The Second Amendment isn't even really Federal law, nor is the rest of the Constitution. It's the supreme law that sits above Federal/state law and constrains what Federal/state laws can do.

(And the Tenth Amendment protects state laws significantly from Federal laws, where applicable.)

[–] stickfigure 5 days ago

If it were that simple then these markets would have been shut down already.

Matt Levine has gone into great detail about the legal chicanery that brought us here, but it summarizes as "it's not gambling, it's futures trading".

This seems like nonsense to you and me (and Matt Levine), but our opinions are irrelevant here. The courts' opinions are, and so far they've been coming down on the side of the prediction markets. Mostly.

So by definition - as weird as it is - it's legal. So far.

[–] monknomo 5 days ago

But we're talking about legislator's opinions here. They make the law. A good way to influence the courts, as a legislator, is to write a law.

Even if you are a state legislator, and federal courts are mixed, you should write the law to raise the issue salience and get the federal law tweak.

Courts really are not the end-all-be-all when we're talking about legislators making laws, that's silly.

[–] ceejayoz 5 days ago

> If it were that simple then these markets would have been shut down already.

Sure, just like storing a bunch of classified docs in a Mar-a-Lago bathroom was.

You are mixing up "currently getting away with it" for legal.

[–] stickfigure 5 days ago

You're mixing up "what is" with "what should be".

[–] cogman10 5 days ago

People are still selling fentanyl without a prescription. Is that legal?

Courts move slow, especially when the party being targeted has a lot of money. Them allowing Kalshi to operate isn't an endorsement, it just means they don't see what Kalshi is doing as a significant harm. The injunction to stop them from operating in Utah is still winding it's way through appeals.

Whether or not what they are doing is legal is not determined until they either settle, Utah drops the case, or the trail and appeals process determines that they are not guilty.

[–] stickfigure 5 days ago

> People are still selling fentanyl without a prescription. Is that legal?

Obviously not. You know how you can tell? Police will stop you from doing it.

[–] tracerbulletx 5 days ago

Isn't it way more complicated than that? A state can obviously make things illegal in that state that aren't illegal nationally, they do it all the time. There would have to be a positively conflicting law to be a debate. (like with drug laws) Normally going in the other direction. Pretty sure you'd need a constitutional amendment to bind a state from doing something. Like in the case of drugs where federal law is often more strict, there's a whole body of case law around that. They made a commerce clause argument, and there's a doctrine they can't force the states to act to enforce a federal law, but also the states can't countermand the federal law, there's a whole history of courts dealing with the interactions.

[–] Tangurena2 5 days ago

> there's a doctrine they can't force the states to act to enforce a federal law, but also the states can't countermand the federal law, there's a whole history of courts dealing with the interactions.

The Fugitive Slave Acts were two of these conflicts. The first one overruled any state that offered sanctuary while also making it a federal crime to assist runaways. The second one aggravated tensions between slave states and the rest of America. Under the Fugitive Slave Act of 1850, it was not legal for a suspected runaway slave to deny being the slave described in the paperwork. States were required to assist slave catchers. Also, suspected runaway slaves were not permitted any sort of trial. It legalized kidnapping any black person who vaguely fit the description on the paperwork.

https://en.wikipedia.org/wiki/Fugitive_Slave_Act_of_1850

Prior to the Commodities Futures Modernization Act of 2000, some states regulated credit default swaps as insurance products while some state's statutes said that CDS were gambling (and outlawed it completely). The CFMA overruled the states that had outlawed CDS. This was one of the major causes of the 2007/2008 financial meltdown.

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

[–] jaredklewis 5 days ago

It's always plainly obvious what is illegal. Given the total lack of ambiguity, why do we even need all these courts and judges to decide stuff? After all, we're all intimately familiar the Commodity Futures Trading Commission Act of 1974, relevant state laws, and how the constitution would control the interaction bewtween these. /s

I despise gambling and would very like if there was less of it. But that's not a legal opinion, those are just my feelings. There are good faith legal arguments that these state laws cannot override federal laws and that the federal laws allow these prediction markets. We live in a country with an enormously complex legal system and with a volume of legislation that is, without question, far beyond what any single individual could reasonably comprehend. This often means that what is legal and illegal is unclear. I think this is one of those circumstances.

[–] rconti 5 days ago

I agree, this needs to be decided by the court. But it's not really an issue of a state law trying to supersede a federal law. It's a state law superceding the authority a _regulator_ believes it has.

Kalshi has a serious uphill battle here. As the Judge said in granting Utah's motion and delying Kalshi's motion for a preliminary injunction:

> Shelby determined the text of US law makes it clear that state regulation is not forbidden. US law states that CFTC jurisdiction does not “supersede or limit the jurisdiction conferred on courts of the United States or any State,” and “explicitly provides for State regulation of its gaming laws in all but a few specified cases,” he wrote.

> “Congress is aware that some States permit gambling while others do not, and the CEA explicitly provides for State jurisdiction,” Shelby wrote.

[–] jaredklewis 4 days ago

Right but the CFTC is saying their authority is based in federal law.

Judge Shelby’s interpretation quoted above seems in conflict with how the 3rd circuit ruled in Kalshiex v. Flaherty, which is why I think the law is not entirely clear yet. I would be surprised if SCOTUS eventually weighs in

[–] monknomo 5 days ago

I'm not saying I'm right here, but I am saying it seems facially ridiculous to consider "an opinion on who will win the super bowl" as a commodity future. Like, nobody is getting a superbowl win delivered to their house after the future contract executes.

all of this stuff is very obviously sports betting. Kalshi can say the piss on our pantlegs is rain, but I don't feel very obligated to belive it. I recognize the legal argument, I personally think it's bunk, I think it's reasonable for a legislator to say it's bunk, and it is hardly settled to say that Utah can't do this.

In fact, we rewound to, say like 2010, this would be completely obvious that Utah is correct.

[–] jaredklewis 5 days ago

I guess I think these concepts are slightly fuzzier than you do. I think concepts like gambling, speculating, hedging and investing are all distinct but also all have some overlap. But again these are just my feelings.

I haven't read the CFTC Act of 1974, but I've read opinions of respected lawyers and legal scholars on this issue and there doesn't seem to be a consensus. I think there's a good chance this one goes to the supreme court. SCOTUS doesn't usually weigh in on things that are "facially ridiculous."

It seems many people seem to think our justice system is now just a sham, but I think that at present, despite its many flaws, it is by far the most well functioning branch of our government and that more often than not, the courts are making a good faith effort to do a difficult task.

If I were god-king would I make legislation to ban prediction markets for sports events and such? Without question. Is it obvious to me that our current set of laws does not grant the CFTC jurisdiction over this? I guess not.

[–] monknomo 4 days ago

you do know that we can have an opinion both on:

* laws that ought to exist

* how existing laws ought to be interpreted

* whether a given interpretation is correct

* whether a given interpretation is good

and that the court attempts to interpret and apply laws, not create them? And the legislature can just change laws if they don't like what the court does?

Just because some highly compensated lawyers, and some who wish Kalshi would butter their bread, throw some dust in the air doesn't mean we have to strap on a dunce cap and pretend a bet on the superbowl is really a commodity future. We don't even have to pretend that's a reasonable opinion to have.

[–] jaredklewis 4 days ago

Yea I’m all for legislators legislating, they just don’t tend to do that of late.