Hacker News

points by dghlsakjg 4 days ago | 0 comments

I'll bite: futures contracts serve a valuable social/economic function outside of their existence, and are just a commoditization/securitization of something that arises naturally out of doing business (agreeing on a future price today). While you can gamble with futures contracts, the underlying purpose is actually incredibly useful.

Prediction betting has an argument that truth discovery is economically valuable, but I don't buy it.

If prediction betting was banned, only two businesses would be affected, Kalshi and Polymarket. If futures markets were banned, many businesses would be massively affected, and almost every business would be indirectly affected.

[–] joshheitzman 4 days ago

Probably without intending it you've gotten right to the heart of what's at dispute here.

The common language meaning of gambling is too broad and captures things that aren't legally regulated as gambling such as gambling (again common meaning of the word) with futures contracts. Sometimes gambling is dressed up a speculating, but one could argue that one can speculate as a participant in many card games since they allow room for analysis and aren't pure chance. This is what the legal dispute comes down too.

The other is the debate for the value of the truth discovery. Some folks buy it and others don't. SCOTUS will likely take the case to resolve the split between the circuits and we'll if the value of this even enters into the decision or it just comes down interpretation of the statutes.

[–] freejazz 4 days ago

>Probably without intending it you've gotten right to the heart of what's at dispute here.

Awfully rude.

>The common language meaning of gambling is too broad and captures things that aren't legally regulated as gambling such as gambling (again common meaning of the word) with futures contracts.

No it doesn't. No one argues that state gambling laws actually regulate the trade of securities, options, or anything actually covered by the CFTC, so this is a completely sham argument.

>The other is the debate for the value of the truth discovery. Some folks buy it and others don't. SCOTUS will likely take the case to resolve the split between the circuits and we'll if the value of this even enters into the decision or it just comes down interpretation of the statutes.

The value of truth discovery is completely irrelevant to these cases. Either congress intended to regulate sports gambling under the CFTC, or it didn't. The executive branch can't get around that.

[–] santadays 4 days ago

Kalshi and Polymarket make money because they advertise themselves as legal gambling (I haven't done extensive research of this, but I do get alot of advertisements for them). Then they justify their existence as some sort of futures market.

This feels like a similar playbook to crypto. People make money through pump and dump schemes and/or luck/speculation. Then they justify their existence as some bastion of decentralized power/coordination.

[–] dzhiurgis 4 days ago

There was recently a case where insurance contract was put on prediction market. Also there is similar thing called catastrophe bond.

[–] joshheitzman 4 days ago

That's really interesting. On another thread someone said something about health insurance related contracts like that was some kind of slippery slope bad outcome from allowing prediction markets. I didn't think anything of it at the time, but our health system is so broken I'll support anything that shakes up the status quo. I doubt Kalshi or Polymarket will turn in to that, but maybe they'll create a wedge for someone else to create a health event marketplaces.

I think a lot of folks here think I'm debating this because I support prediction markets, but I could have cared less which way SCOTUS comes down on this. Now I'm rooting for Kalshi when SCOTUS picks this up and not regretting the time I spent on this. I try to avoid commenting on anything political, but I had a moment of weakness while I was waiting for benchmarks to run. Thanks!

[–] freejazz 4 days ago

They have nothing to do with each other, at all, and you are grasping at straws.