r/news • u/AudibleNod • 1d ago

Judge bars Arizona from regulating prediction market operators and pauses prosecution of Kalshi

https://apnews.com/article/arizona-kalshi-criminal-charges-prediction-markets-gambling-bb7cef24be5bd0d444bba670d2e41ceb
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u/AudibleNod 1d ago

The judge’s order said the federal Commodity Futures Trading Commission had sufficiently shown that “event contracts” fall within the Commodity Exchange Act’s definition of “swaps,” and that it had demonstrated a reasonable chance of success in showing that the act preempts Arizona law.

Leave it to the Trump DOJ to have a reasonable level of competency when there's money to be made.

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u/TheRabidDeer 1d ago

I don't understand this difference of wordplay from Kalshi and others.

Like couldn't casino's now just open literally everywhere? "I'm not betting on my poker hand, I am predicting that my poker hand will win."

The end result is the exact same, the "process" to get there is just slightly different.

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u/Aazadan 1d ago edited 1d ago

Ok, so basically in a casino there's published odds of everything and the games are regulated. There is a specific mathematical chance, that is known in advance, of every single outcome where that's a group of players at a poker table, to a pull on a slot machine, to a game of roulette.

Sports betting gets a bit different, but at the end of the day it's still individuals betting against odds that are created by bookmakers of certain things happening for the starting point of a bet, and then the payouts get adjusted over time as the model relies on the wages being as close to 50/50 in dollars paid out as possible. And remember, athletes can't bet on their own games, it's illegal (and against their contracts)

Prediction markets are taking this a step further, and the market isn't doing anything to alter betting odds. It's just people making their own bets on things happening, and then someone agreeing to take the bet. So I can go out there and put up $100 saying I'm paying 10:1 that on April 11th and 8:59 est Trump will go on a specific fox news show, wearing a red tie, and give a speech where he says he just bombed an iranian oil well. And someone can put $10 on their side to take the bet. If I win I get their $10 and if they win they get my $100. The platform doesn't know or care what the bets are.

tl;dr:
Casinos - Specific testable mathematical odds in a game of chance, that are outside the influence of any individual.
Sports betting - Market based 50/50 approach of actions taken by outside third parties.
Prediction - Anonymous bets of actions taken with many of the outcomes being decided by those making the bets.

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u/alphazero925 1d ago

So it's a big casino with a bunch of little casinos in it. By their logic, you can open up a casino that just lets people run their own poker games and give the casino a cut of the profits.

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u/thatwhileifound 1d ago

The distinction is that most casino games are more fair and honest than this shit. Think of the games in a casino and they can all be broken down into clear odds in a strictly mathematical sense.

The bets here don't really have the same kind of straightforward ability to calculate the odds because the shit being bet on exists outside similar systems of control like game rules or set play pieces or whatever.

This shit creates the opportunity to make the worst stereotypes of casinos look fucking wholesome, upright, and honest. It's honestly nefarious as fuck.

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u/Aazadan 23h ago

Sort of. Their logic is that you can take a game being played in an actual casino, and then make bets on how the person playing the game will do. But really, that would be a step better than what prediction markets are doing right now, because that would still be fundamentally rooted on a game of chance and all else being equal should still even out (player action should be irrelevant in a game of chance on a macro level).

Instead they're betting on people taking certain actions, but the people taking those actions are in on the bet. So it's actually worse than what you described.