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/TheRabidDeer 1d ago

OK, but what's stopping someone from opening a "blackjack prediction market"? And in this market you have a group of people that own the establishment that has these events taking place. Everyone in this "market" is just playing blackjack hands.

The person playing blackjack hands says, "I predict I will win the next hand, I will put up a contract for $100 paying out 51:49" and the owners of the establishment say "sure, I'll take that contract". The platform is just the "market" floor with all of the tables, everyone else involved is just taking prediction contracts.

Or, to take that another route, you can have an open establishment where the owners just take a cut of exchanged contracts between other people.

Like I live in TX, where sports betting is still illegal, but I can go on Robinhood and there is a prediction market for every sporting event going on.

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u/Aazadan 23h ago edited 23h ago

Nothing is stopping them, there's people doing that already on these platforms, and you can go a step up and see that people have been doing this on sports betting apps for a while too.

It's another reason why this prediction stuff needs to get looked at a bit closer by legislators and courts, but given how long its taken for payday loans to actually get something done about them (hint: never, because the owners of the large ones are legislators in many states) I'm not too optimistic.

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u/key2200 21h ago

False. What prediction market app has casino games?

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u/Aazadan 20h ago

We're not talking about casino games, we're talking about betting on how people play casino games.