For the record, Minnesota currently has a complete ban on sports betting.
We've seen a couple other states that allow sports betting go after prediction markets. Personally, I feel that any state that allows sports betting is going to struggle to argue a case to ban prediction markets because you're essentially arguing over implementation details. Even arguments that certain prediction markets are ripe for insider trading or morally wrong fall a bit flat when you realize that traditional sportsbooks let you bet on things like college basketball player props and the little league world series.
I'm still not sure Minnesota will win their case, but it feels like that detail gives them a lot better chance of winning compared to many other states.
Arguing over implementation details is a pretty common thing for laws to do. Maybe it would weaken the logical consistency of their laws, but that's not really a thing that matters.
Why do states allow hunting some animals and not others? Why do states distinguish between different forms of income to tax? It's all implementation details.
I wasn't saying we shouldn't debate the implementation details. I just think they should be separate arguments.
It's like if someone killed my dog with 3d printed gun and so everyone started talking about banning or regulating 3d printers. It's like, yes, debating 3d printer regulation is probably a worthwhile debate to have, but regardless of where we end up on that it doesn't change the fact that that person killed my dog.
We should be having a debate as to whether there are certain things that are off limits to bet on, but regardless of where that debate goes, if a state has banned sports betting, it should be banned regardless of the platform.
I don't see why it even would weaken the logical consistency. Just because a state allows gambling does not mean they need to allow anyone to open a casino or betting site. You still need to apply for a licence and follow local regulations. If the prediction markets make sure to follow the regulations they should obviously be granted a licence to operate.
I think you could make a case in separating the two, of course opening further discussion, but because sports betting takes place in a comparatively very controlled environment I think the risk profile is pretty different versus, idk, betting that the temperate will be at or above a certain point and then someone sticks a hair dryer on the thermostat[1]. Cheating can happen in sports of course, but the risk profile and real-world impact I think is quite a bit different. Worth discussing, but I think that's an important distinction.
Separately, I believe over time that prediction markets will become the source of real world truth. Why? Because money is at stake and so validity and verification matter. It'll be interesting to see how, if this comes to fruition, how laws in states like Minnesota affect news reporting and journalism. It seems likely to me that at a certain point prediction markets will buy traditional media and news outlets to hire out the fact-finding and reporting teams to ensure ground truth, and of course to use journalism as the gateway to the market. So you read an article "China disappears random person" and then at the end you click a button and bet whether that person is alive or dead or whatever.
> I think you could make a case in separating the two, of course opening further discussion, but because sports betting takes place in a comparatively very controlled environment I think the risk profile is pretty different versus, idk, betting that the temperate will be at or above a certain point and then someone sticks a hair dryer on the thermostat[1]. Cheating can happen in sports of course, but the risk profile and real-world impact I think is quite a bit different. Worth discussing, but I think that's an important distinction.
That's kind of the point I was getting that. That's not really an argument about prediction markets, it's about what things should we be allowed to bet on.
I'm looking at FanDuel right now and I can bet on 1v1 eSports games of FIFA. The bets aren't even just who will win, but it's things like how many goals will a team score or who will score first. During the last Superbowl books were offering bets on things like what color tie the announcers would wear. I get that there's maybe a slight difference between that and betting on what words a sports announcer will say during the broadcast, but IMO, you're splitting hairs. They're both very easily to manipulate and very open to insider trading.
I think you probably agree with this, but IMO, there needs to be two separate conversations. One, are prediction markets sportsbooks by another name? Two, are there certain markets that we should not allow betting on?
Personally, I think the answer to both of those is yes, but I think if you smush them together into one conversation it makes things really messy.
The environments of various bets have varying degrees of "control" from insider trading. I wouldn't say that sports is more controlled than most other environments. Point shaving scandals are certainly as old as college sports.
The real question is what the purpose of prediction markets are. For sports, there isn't really much of a purpose to the markets except entertainment for the bettors, and harvesting cash for the bookies. There are also various advantage bettors (who may be involved in corruption or not), who attempt to harvest cash from some combination of the bookies and the bettors. Generally IMO these are bad due to simple human frailty though. We figured out a long time ago that for the most part, making gambling available to the general public was a net negative to society, because it mostly transfers money from addicts to big corporations, destroying lives.
For major world events, one purpose of prediction markets is just to generate a price. It's potentially useful for people to know that, in an adversarial market, what the aggregate probability of an event is. It can also be useful theoretically to hedge risks. Whether it's practical to do that depends on the depth of the market though, and with the current markets, it's not. Even more traditional "prediction" markets like commodity futures aren't deep enough to usefully hedge most risks. For example, you might think that major oil companies might hedge future pricing risks, e.g. they want to drill an oil field with a high production cost, but they're worried that the price might go down before they finish production on the wells. Generally though, the markets aren't deep enough for them to be able to do this, so they just won't drill fields that have a production cost more than roughly the lowest price in the past 20-30 years, depending on the age of the executives in charge of the decision.
There's this other purpose of prediction markets though, which is money/information laundering. People may have secret information where their employer has a strong interest in it remaining private, however the person with the information isn't that well compensated, so they monetize the information on prediction markets. On the darker side, you can have wildly illegal markets like "assassination futures" where people bet on when someone will die, and you can bet on a particular outcome, and then make it come true. There are lots of markets somewhere in the middle where someone can take an action in the context of them being a trusted agent of an organization, but instead of following their duty as an agent, they do what is profitable based on their bets in the prediction market.
Overall, IMO there are some good uses for prediction markets that allow people to hedge risk on both sides and enable useful economic activity, but most of the uses I've seen in practice are a net negative.
> So you read an article "China disappears random person" and then at the end you click a button and bet whether that person is alive or dead or whatever.
So think really hard about what the problem with this whole concept might be...
I think sports betting is a lot less harmful than prediction markets. With sports betting if someone throws a game to get a pay day, for instance, the only real consequence is on the reputation of the sport. In prediction markets, people can do all sorts of awful things to make money as insiders..
Most available data suggests that sports betting is much worse for the people making the bets, as it better targets people with poor impulse control. Bad bets in political markets aren't causing measurable increases in bankruptcy and domestic violence rates (https://thezvi.substack.com/p/the-online-sports-gambling-exp...).
Yeah, prediction markets are like if you could bet on arbitrary decisions a coach or manager might make. Like starting lineup or different trades of players between teams or the size of a players contract in dollars, rather than events that happen during gameplay. There are people who know the facts already but the public does not.
First, over 90% of the wagers on Polymarket and Kalshi are already on sports (quoting John Oliver's Last Week Tonight on that one). Despite the headlines, Kalshi and Polymarket are mainly just sportsbooks.
Second, while yes, some of the markets available on prediction markets can push people to do awful things, there are plenty that are harmless. I'm cherry picking to make an extreme point, but I would so much rather have someone betting on what the temperature in Los Angeles is going to be tomorrow on Kalshi than betting on who will win the little league world series on DraftKings.
I support regulation saying certain things should not be allowed to be bet on, but allowing bets on morally questionable things isn't a quality unique to prediction markets.
But I thought the Supreme Court said online sports betting was interstate commerce and out of the domain of state legislation. Or did I get that completely wrong?
No, the SC said the federal government can't outright ban sports betting. The logic was that a ban interferes with states right to legalize sports betting.
(To be clear, it is still an nonsensical decision though. Congress does still have the power to regular gambling under the interstate commerce clause, just not outright ban it)
I have a website I run that is focused on sportsbetting so while I know high level what is legal where, I'm not actually in Minnesota, so I don't know every single detail especially when it comes to what's allowed in person.
My guess would be that either A) that's tribal land and there's an exemption for that in the current laws or B) they have a casino, but don't offer sports betting or C) they only allow sports betting on the property by either requiring all bets to be placed in person or the app they offer is for sportsbetting is geo-fenced to their property (which is how states like WA do it)
I mean, that's exactly why a state has the right to regulate this, historically it has been an extremely regulated activity. You can personally feel however you want, but the fact that a state does allow sports betting does not diminish this even slightly.
This has been banned for generations. It's called gambling.
Of course, we all have to sit through another round of Silicon Valley pretending they've discovered some new exciting business model that's just vice.
Unlicensed gypsy cabs, SROs, shift work, patent medicines, narcotics dealing, customs fraud, and smuggling already had established market entrants I guess.
I could imagine cases where prediction markets could offer some actual insight, but in practice they seem few and far between. Most markets I've seen devolve into one or more of: betting on unimportant events (e.g. sports games), insider trading, or poorly written ambiguous resolution criteria. It's just hard for me to imagine that, on net, these markets will offer more societal good than the harm we've seen from sports betting.
as the article notes, prediction markets are regulated by the CFTC as a commodities futures contract, so I'm not sure how any state law survives a federal pre-emption challenge. On the other hand, it's a little unusual to see a federal agency suing to protect its turf. Would've expected a class action by a Minnesota user of the service to bring the challenge instead.
I'm curious to see how this works out, because sports betting is _not_ in the CFTC's remit, and Kalshi etc's argument that states can't regulate them because they're not technically sports betting is contrary to the spirit of the law
> because sports betting is _not_ in the CFTC's remit
Traditionally it has not been, but the current CFTC says that 'prediction bets on sports' ARE under their purview. This has not been fully challenged in court, though.
This should not be downvoted and is a legitimate criticism. Trump Jr. has a "special advisory role" in both Kalshi and polymarket. It would track with this administration to deploy a rapid defense of a corruption generation market where the current president's son is getting paid off by the two main competitors in the market.
Given that exactly the same thing has been regulated as gambling in Europe under the name "betting exchange" for 25 years the case for it being gambling is quite strong.
They're not going to get rid of them, they're just going to drive them underground, which will make them impossible to regulate, which will make using them less safe. I don't participate in prediction markets, but I would bet everything I own on this outcome.
That's already what it is. They are an underground gambling site pretending that they're not doing things that they literally do by calling it something else. They're like a drug dealer who thinks they're slick by calling their drugs "research chemicals".
Exactly. I see this common idea trotted out that "where there's a will, there's a way" -- if the government bans something, the ban will never be effective, because people still want that thing, and so a ban will just encourage violating the law.
But that's highly contingent on that thing being something people are willing to violate the law over, and on the convenience of that thing not being significantly impacted by prohibition. Neither of which are true for prediction betting (it's almost identical to sports betting in that regard, imo.) The only reason these markets proliferate is precisely because they are legal.
There's the same upside as pretty much all other forms of gambling. Plenty of people enjoy it and it can be used to generate tax revenue for the state.
Don't get me wrong, there's tons of harm that can come from it, but the arguments to allow them are essentially the same arguments for allowing sports betting.
This is true, however many of those arguments are weaker when applied to things for which the outcome is more consequential than the outcome of a sporting game.
Whenever I see something weird happen in a sports game, or even a lack of effort by individual players, my first thought is if sports betting was responsible.
The law also goes after payment providers and network providers (vpn) etc if they "knowingly" provide service to anyone who engages in prediction market betting.
The law[0] as written is a mess. You could in theory shut down the "legal" Minnesota state lottery that is otherwise carved out from the law by claiming they are providing data on outcomes via the internet if someone outside the state is betting on the outcome of the lottery in a prediction market.
I get a lot of value from prediction markets and query for them most days. Today for the Los Angeles Mayor's race and the Kentucky 4th district Representative race. In both cases I saw a big difference between the market and the vibe on my feeds. I believe that the market emits higher quality predictions.
Each market is a community with a financial incentive to think outside of the bubble.
there is one upside, its a big incentive to indirectly leak things like album release dates and military operations. anything that helps get some secrets out is a positive in my book
No, this doesn't work. Predictions markets can only resolve to things that are publicly verifiable, so any leaked information is information that was destined to become public anyway. Furthermore, the leaker is disincentivized to leak in such a way that the act of leaking could compromise their insider knowlege; the structure of the markets means that leakers don't want you to have this information in any way that opponents could usefully invalidate.
They're just gambling. I'm not trying to argue for or against gambling here, but please stop trying to delude yourselves into thinking these gambling sites are anything other than gambling.
Those markets create pressure to ensure that real physical goods and useful services are priced accurately. Prediction “markets“ are in my estimation no different than roulette.
If you cross your eyes hard enough, you could claim that roulette gambling provides economic pressure to ensure that roulette wheels are balanced evenly. But when the roulette wheel is Vanah White’s dress color, what does that mean? Charitably, it’s a fun pass time. Through a dystopian lens, prediction markets pressure all public figures to play a kind of Keynsian Beauty Contest with their own behavior. Like social cooling for the celebrity/owning class.
Information aggregation is the theoretical upside of prediction markets. Granted, their effectiveness in that role is an empirical question. For gambling in general, the upside is that people obviously enjoy it, not to mention the right/freedom to make choices about how one spends time and money as a responsible adult.
If harm to the consumer and societal burden are the downsides you're concerned about, you could justify banning smoking, alcohol, and junk food for the same reasons. We don't generally do that because we recognize that where there's demand there will be a market, whether it's legal or illegal. So you also need to weigh the potential harms of a black market against those of a legal and regulated market.
Now yes, people bet on the derivative value of those ownership shares... but that also happens to basically every asset. If a stock is a prediction market, then so is corn, and gold, and your home.
Yes, they are. Accurate prediction is rewarded in every market, for every asset or asset class. There are adjacent order benefits (I live in my home, I eat corn, I have a say in how a company is run) but these are never divorced from the impact of prediction and prediction in aggregate is just a crowdsourced leading indicator of value; oil spikes the moment a missile hits Iran not because the 2 are explicitly linked, but because the market has predicted the effect on the flow of that oil over some subsequent timeframe and priced itself accordingly
The difference in my mind is that prediction markets and gambling are betting on outcomes, not long term behaviors. You could make the argument that they are the same, in the sense that buying a stock is "betting" on a company to do well, but I think you'd be making a silly argument. Stocks are intangible these days, but they were traditionally a physical thing that one would trade. If you're betting on prediction markets, there's nothing to trade after the event happens, just payouts.
Stocks are shares of ownership. Now, in practice many people buy them as bets, but even those aren't really predictions. Prediction markets are time-boxed all-or-nothing plays. You are either correct, or you lose your entire stake.
Couldn’t we say that any market rewards prediction? And that this is generally seen as a beneficial quality that results in more accurate valuations with better liquidity?
> The prohibition extends to services supporting prediction markets, like virtual private networks, that could allow consumers to disguise their location and get around the ban.
That's a creative interpretation by NPR. The law doesn't mention VPNs. The law bans:
> provid[ing] supportive services to a prediction market or consumer knowing that the services will be used to identify a consumer’s location, transfer money, or make or process payments for the purpose of allowing consumers to make wagers or to settle wagers made by consumers in violation of this section.
There should be a ban on the instagram reels showing gambling like it's not a big deal. They are deliberately targeting teens and it's quite sickening.
If you work at one of these companies it's the same as working for a payday loan company. You are making blood money.
There might be a couple more, but there is far less legal gambling in MN than anywhere else I've been in the US (though I have not been everywhere in the past 5 years, and I assume laws have changed enough to ignore experience older than that).
Indian tribal casinos are only legal because they are in a separate country as far as the state is concerned. (they don't bother, but each reservation has a good case to join the UN if they wanted to)
Excluding tribal casinos like Mystic and Grand Casino, MN has Canterbury, Running Aces, bingo, pull tabs, and the state lottery. Horse racing and poker rooms at Canterbury and Running Aces, IIRC no limit betting is not allowed in poker.
SCOTUS will probably soon rule that extracting wealth from alienated gamblers is a fundamental American right, that the founding fathers had in mind when drafting the constitution.
They're not banning prediction markets from out-of-state, they're banning it entirely. A state cannot ban out-of-state alcohol, but it can ban alcohol outright if it wanted to.
For the record, Minnesota currently has a complete ban on sports betting.
We've seen a couple other states that allow sports betting go after prediction markets. Personally, I feel that any state that allows sports betting is going to struggle to argue a case to ban prediction markets because you're essentially arguing over implementation details. Even arguments that certain prediction markets are ripe for insider trading or morally wrong fall a bit flat when you realize that traditional sportsbooks let you bet on things like college basketball player props and the little league world series.
I'm still not sure Minnesota will win their case, but it feels like that detail gives them a lot better chance of winning compared to many other states.
Arguing over implementation details is a pretty common thing for laws to do. Maybe it would weaken the logical consistency of their laws, but that's not really a thing that matters.
Why do states allow hunting some animals and not others? Why do states distinguish between different forms of income to tax? It's all implementation details.
I wasn't saying we shouldn't debate the implementation details. I just think they should be separate arguments.
It's like if someone killed my dog with 3d printed gun and so everyone started talking about banning or regulating 3d printers. It's like, yes, debating 3d printer regulation is probably a worthwhile debate to have, but regardless of where we end up on that it doesn't change the fact that that person killed my dog.
We should be having a debate as to whether there are certain things that are off limits to bet on, but regardless of where that debate goes, if a state has banned sports betting, it should be banned regardless of the platform.
I don't see why it even would weaken the logical consistency. Just because a state allows gambling does not mean they need to allow anyone to open a casino or betting site. You still need to apply for a licence and follow local regulations. If the prediction markets make sure to follow the regulations they should obviously be granted a licence to operate.
I think you could make a case in separating the two, of course opening further discussion, but because sports betting takes place in a comparatively very controlled environment I think the risk profile is pretty different versus, idk, betting that the temperate will be at or above a certain point and then someone sticks a hair dryer on the thermostat[1]. Cheating can happen in sports of course, but the risk profile and real-world impact I think is quite a bit different. Worth discussing, but I think that's an important distinction.
Separately, I believe over time that prediction markets will become the source of real world truth. Why? Because money is at stake and so validity and verification matter. It'll be interesting to see how, if this comes to fruition, how laws in states like Minnesota affect news reporting and journalism. It seems likely to me that at a certain point prediction markets will buy traditional media and news outlets to hire out the fact-finding and reporting teams to ensure ground truth, and of course to use journalism as the gateway to the market. So you read an article "China disappears random person" and then at the end you click a button and bet whether that person is alive or dead or whatever.
[1] https://finance.yahoo.com/markets/options/articles/polymarke...
> I think you could make a case in separating the two, of course opening further discussion, but because sports betting takes place in a comparatively very controlled environment I think the risk profile is pretty different versus, idk, betting that the temperate will be at or above a certain point and then someone sticks a hair dryer on the thermostat[1]. Cheating can happen in sports of course, but the risk profile and real-world impact I think is quite a bit different. Worth discussing, but I think that's an important distinction.
That's kind of the point I was getting that. That's not really an argument about prediction markets, it's about what things should we be allowed to bet on.
I'm looking at FanDuel right now and I can bet on 1v1 eSports games of FIFA. The bets aren't even just who will win, but it's things like how many goals will a team score or who will score first. During the last Superbowl books were offering bets on things like what color tie the announcers would wear. I get that there's maybe a slight difference between that and betting on what words a sports announcer will say during the broadcast, but IMO, you're splitting hairs. They're both very easily to manipulate and very open to insider trading.
I think you probably agree with this, but IMO, there needs to be two separate conversations. One, are prediction markets sportsbooks by another name? Two, are there certain markets that we should not allow betting on?
Personally, I think the answer to both of those is yes, but I think if you smush them together into one conversation it makes things really messy.
The environments of various bets have varying degrees of "control" from insider trading. I wouldn't say that sports is more controlled than most other environments. Point shaving scandals are certainly as old as college sports.
The real question is what the purpose of prediction markets are. For sports, there isn't really much of a purpose to the markets except entertainment for the bettors, and harvesting cash for the bookies. There are also various advantage bettors (who may be involved in corruption or not), who attempt to harvest cash from some combination of the bookies and the bettors. Generally IMO these are bad due to simple human frailty though. We figured out a long time ago that for the most part, making gambling available to the general public was a net negative to society, because it mostly transfers money from addicts to big corporations, destroying lives.
For major world events, one purpose of prediction markets is just to generate a price. It's potentially useful for people to know that, in an adversarial market, what the aggregate probability of an event is. It can also be useful theoretically to hedge risks. Whether it's practical to do that depends on the depth of the market though, and with the current markets, it's not. Even more traditional "prediction" markets like commodity futures aren't deep enough to usefully hedge most risks. For example, you might think that major oil companies might hedge future pricing risks, e.g. they want to drill an oil field with a high production cost, but they're worried that the price might go down before they finish production on the wells. Generally though, the markets aren't deep enough for them to be able to do this, so they just won't drill fields that have a production cost more than roughly the lowest price in the past 20-30 years, depending on the age of the executives in charge of the decision.
There's this other purpose of prediction markets though, which is money/information laundering. People may have secret information where their employer has a strong interest in it remaining private, however the person with the information isn't that well compensated, so they monetize the information on prediction markets. On the darker side, you can have wildly illegal markets like "assassination futures" where people bet on when someone will die, and you can bet on a particular outcome, and then make it come true. There are lots of markets somewhere in the middle where someone can take an action in the context of them being a trusted agent of an organization, but instead of following their duty as an agent, they do what is profitable based on their bets in the prediction market.
Overall, IMO there are some good uses for prediction markets that allow people to hedge risk on both sides and enable useful economic activity, but most of the uses I've seen in practice are a net negative.
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> So you read an article "China disappears random person" and then at the end you click a button and bet whether that person is alive or dead or whatever.
So think really hard about what the problem with this whole concept might be...
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I think sports betting is a lot less harmful than prediction markets. With sports betting if someone throws a game to get a pay day, for instance, the only real consequence is on the reputation of the sport. In prediction markets, people can do all sorts of awful things to make money as insiders..
Most available data suggests that sports betting is much worse for the people making the bets, as it better targets people with poor impulse control. Bad bets in political markets aren't causing measurable increases in bankruptcy and domestic violence rates (https://thezvi.substack.com/p/the-online-sports-gambling-exp...).
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Yeah, prediction markets are like if you could bet on arbitrary decisions a coach or manager might make. Like starting lineup or different trades of players between teams or the size of a players contract in dollars, rather than events that happen during gameplay. There are people who know the facts already but the public does not.
First, over 90% of the wagers on Polymarket and Kalshi are already on sports (quoting John Oliver's Last Week Tonight on that one). Despite the headlines, Kalshi and Polymarket are mainly just sportsbooks.
Second, while yes, some of the markets available on prediction markets can push people to do awful things, there are plenty that are harmless. I'm cherry picking to make an extreme point, but I would so much rather have someone betting on what the temperature in Los Angeles is going to be tomorrow on Kalshi than betting on who will win the little league world series on DraftKings.
I support regulation saying certain things should not be allowed to be bet on, but allowing bets on morally questionable things isn't a quality unique to prediction markets.
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In states which allow sports betting it is still regulated. Thet are just an illegal betting sites.
They already made the argument themselves: they’re skirting current laws by calling them financial derivatives.
But I thought the Supreme Court said online sports betting was interstate commerce and out of the domain of state legislation. Or did I get that completely wrong?
The core holding was this
> "congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own."
No, the SC said the federal government can't outright ban sports betting. The logic was that a ban interferes with states right to legalize sports betting.
(To be clear, it is still an nonsensical decision though. Congress does still have the power to regular gambling under the interstate commerce clause, just not outright ban it)
> Minnesota currently has a complete ban on sports betting.
Canterbury Park would like a word…
I have a website I run that is focused on sportsbetting so while I know high level what is legal where, I'm not actually in Minnesota, so I don't know every single detail especially when it comes to what's allowed in person.
My guess would be that either A) that's tribal land and there's an exemption for that in the current laws or B) they have a casino, but don't offer sports betting or C) they only allow sports betting on the property by either requiring all bets to be placed in person or the app they offer is for sportsbetting is geo-fenced to their property (which is how states like WA do it)
I mean, that's exactly why a state has the right to regulate this, historically it has been an extremely regulated activity. You can personally feel however you want, but the fact that a state does allow sports betting does not diminish this even slightly.
This has been banned for generations. It's called gambling. Of course, we all have to sit through another round of Silicon Valley pretending they've discovered some new exciting business model that's just vice.
Unlicensed gypsy cabs, SROs, shift work, patent medicines, narcotics dealing, customs fraud, and smuggling already had established market entrants I guess.
I could imagine cases where prediction markets could offer some actual insight, but in practice they seem few and far between. Most markets I've seen devolve into one or more of: betting on unimportant events (e.g. sports games), insider trading, or poorly written ambiguous resolution criteria. It's just hard for me to imagine that, on net, these markets will offer more societal good than the harm we've seen from sports betting.
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Anyone taking bets on how that ban will last?
Anyone taking bets on whether that bet will be available in prediction markets by the end of the week?
I hope someone is. From the bill:
> EFFECTIVE DATE This section is effective August 1, 2026, and applies to crimes committed on or after that date.
as the article notes, prediction markets are regulated by the CFTC as a commodities futures contract, so I'm not sure how any state law survives a federal pre-emption challenge. On the other hand, it's a little unusual to see a federal agency suing to protect its turf. Would've expected a class action by a Minnesota user of the service to bring the challenge instead.
I'm curious to see how this works out, because sports betting is _not_ in the CFTC's remit, and Kalshi etc's argument that states can't regulate them because they're not technically sports betting is contrary to the spirit of the law
> because sports betting is _not_ in the CFTC's remit
Traditionally it has not been, but the current CFTC says that 'prediction bets on sports' ARE under their purview. This has not been fully challenged in court, though.
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What if CFTC would start to claim they are allowed to regulate online casinos or online poker? I feel that would be about as non-sensical.
There’s no “house” or “book” aspect to Kalshi. They are nothing more than contracts that are bought and sold between individuals.
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Nevada was able to get it banned. The casino pull is huge.
https://www.cnn.com/2026/03/21/politics/trump-prediction-mar...
> it's a little unusual to see a federal agency suing to protect its turf.
This is Don Jr's consulting fee at work.
This should not be downvoted and is a legitimate criticism. Trump Jr. has a "special advisory role" in both Kalshi and polymarket. It would track with this administration to deploy a rapid defense of a corruption generation market where the current president's son is getting paid off by the two main competitors in the market.
*Minnesota becomes first state to ban the use of prediction markets as a loophole for sports gambling.
It’s hard to pretend this isn’t at least gambling-adjacent when most people are simply betting on outcomes.
Given that exactly the same thing has been regulated as gambling in Europe under the name "betting exchange" for 25 years the case for it being gambling is quite strong.
It’s easy to pretend, just really hard to convince anyone without a direct financial interest.
They're not going to get rid of them, they're just going to drive them underground, which will make them impossible to regulate, which will make using them less safe. I don't participate in prediction markets, but I would bet everything I own on this outcome.
That's already what it is. They are an underground gambling site pretending that they're not doing things that they literally do by calling it something else. They're like a drug dealer who thinks they're slick by calling their drugs "research chemicals".
Making using them less safe means that certain kinds of better are less likely to use them, which may be a purpose of this legislation.
Exactly. I see this common idea trotted out that "where there's a will, there's a way" -- if the government bans something, the ban will never be effective, because people still want that thing, and so a ban will just encourage violating the law.
But that's highly contingent on that thing being something people are willing to violate the law over, and on the convenience of that thing not being significantly impacted by prohibition. Neither of which are true for prediction betting (it's almost identical to sports betting in that regard, imo.) The only reason these markets proliferate is precisely because they are legal.
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I wonder if it can really be enforced. It's clear that prediction markets are a scourge -- there seems to be no upside whatsoever.
> there seems to be no upside whatsoever
There's the same upside as pretty much all other forms of gambling. Plenty of people enjoy it and it can be used to generate tax revenue for the state.
Don't get me wrong, there's tons of harm that can come from it, but the arguments to allow them are essentially the same arguments for allowing sports betting.
This is true, however many of those arguments are weaker when applied to things for which the outcome is more consequential than the outcome of a sporting game.
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Whenever I see something weird happen in a sports game, or even a lack of effort by individual players, my first thought is if sports betting was responsible.
> I wonder if it can really be enforced.
At the very least maybe it would make the advertising (tv, college campuses, etc) of prediction markets illegal in Minnesota?
That alone seems like a good thing.
The law also goes after payment providers and network providers (vpn) etc if they "knowingly" provide service to anyone who engages in prediction market betting.
The law[0] as written is a mess. You could in theory shut down the "legal" Minnesota state lottery that is otherwise carved out from the law by claiming they are providing data on outcomes via the internet if someone outside the state is betting on the outcome of the lottery in a prediction market.
[0]: https://www.revisor.mn.gov/bills/94/2026/0/SF/4760/versions/... (search for "ARTICLE 8")
No upside whatsoever? Clearly you're not an insider trader.
I get a lot of value from prediction markets and query for them most days. Today for the Los Angeles Mayor's race and the Kentucky 4th district Representative race. In both cases I saw a big difference between the market and the vibe on my feeds. I believe that the market emits higher quality predictions.
Each market is a community with a financial incentive to think outside of the bubble.
there is one upside, its a big incentive to indirectly leak things like album release dates and military operations. anything that helps get some secrets out is a positive in my book
No, this doesn't work. Predictions markets can only resolve to things that are publicly verifiable, so any leaked information is information that was destined to become public anyway. Furthermore, the leaker is disincentivized to leak in such a way that the act of leaking could compromise their insider knowlege; the structure of the markets means that leakers don't want you to have this information in any way that opponents could usefully invalidate.
They're just gambling. I'm not trying to argue for or against gambling here, but please stop trying to delude yourselves into thinking these gambling sites are anything other than gambling.
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But they don't get secrets out, they just make a bet? Show me any information like this on any of the prediction markets...
Thanks to crypto it can't be enforced and is here to stay, like all forms of online gambling.
Do you also believe there is no upside in crowdsourced information found in, say, commodities, equities and futures markets?
Those are not the same as prediction markets
Those markets create pressure to ensure that real physical goods and useful services are priced accurately. Prediction “markets“ are in my estimation no different than roulette.
If you cross your eyes hard enough, you could claim that roulette gambling provides economic pressure to ensure that roulette wheels are balanced evenly. But when the roulette wheel is Vanah White’s dress color, what does that mean? Charitably, it’s a fun pass time. Through a dystopian lens, prediction markets pressure all public figures to play a kind of Keynsian Beauty Contest with their own behavior. Like social cooling for the celebrity/owning class.
Information aggregation is the theoretical upside of prediction markets. Granted, their effectiveness in that role is an empirical question. For gambling in general, the upside is that people obviously enjoy it, not to mention the right/freedom to make choices about how one spends time and money as a responsible adult.
If harm to the consumer and societal burden are the downsides you're concerned about, you could justify banning smoking, alcohol, and junk food for the same reasons. We don't generally do that because we recognize that where there's demand there will be a market, whether it's legal or illegal. So you also need to weigh the potential harms of a black market against those of a legal and regulated market.
Cue in the talking heads to tell us how devastating this ban is.
Does this ban the prediction markets that don’t use real money but instead tokens that are worthless?
If the tokens are worthless, where's the thrill in the gambling?
Isn't the stock market a prediction market as well?
No, a stock is a share of ownership in a company.
Now yes, people bet on the derivative value of those ownership shares... but that also happens to basically every asset. If a stock is a prediction market, then so is corn, and gold, and your home.
Yes, they are. Accurate prediction is rewarded in every market, for every asset or asset class. There are adjacent order benefits (I live in my home, I eat corn, I have a say in how a company is run) but these are never divorced from the impact of prediction and prediction in aggregate is just a crowdsourced leading indicator of value; oil spikes the moment a missile hits Iran not because the 2 are explicitly linked, but because the market has predicted the effect on the flow of that oil over some subsequent timeframe and priced itself accordingly
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The difference in my mind is that prediction markets and gambling are betting on outcomes, not long term behaviors. You could make the argument that they are the same, in the sense that buying a stock is "betting" on a company to do well, but I think you'd be making a silly argument. Stocks are intangible these days, but they were traditionally a physical thing that one would trade. If you're betting on prediction markets, there's nothing to trade after the event happens, just payouts.
Stocks are shares of ownership. Now, in practice many people buy them as bets, but even those aren't really predictions. Prediction markets are time-boxed all-or-nothing plays. You are either correct, or you lose your entire stake.
Not exactly. Kalshi is binary options. Not stocks.
I think the stocks don't have a arbiter managing a discrete outcome between parties that don't have any KYC compliance.
Couldn’t we say that any market rewards prediction? And that this is generally seen as a beneficial quality that results in more accurate valuations with better liquidity?
Stock prices are a prediction built on crowdsourced information.
A commenter noted that MN already bans sports-betting, which is far closer to what prediction markets are than asset trading.
A closer stock analogy would be options.
> The prohibition extends to services supporting prediction markets, like virtual private networks, that could allow consumers to disguise their location and get around the ban.
I'm sorry, what the fuck?
That's a creative interpretation by NPR. The law doesn't mention VPNs. The law bans:
> provid[ing] supportive services to a prediction market or consumer knowing that the services will be used to identify a consumer’s location, transfer money, or make or process payments for the purpose of allowing consumers to make wagers or to settle wagers made by consumers in violation of this section.
"knowing" is key here.
They've been banned for generations. It's called gambling.
Of course, we all have to sit through another round of Silicon Valley pretending they've discovered some new exciting business model that's just vice.
Unlicensed gypsy cabs, SROs, shift work, patent medicines, narcotics dealing, customs fraud, and smuggling already had established market entrants I guess.
There should be a ban on the instagram reels showing gambling like it's not a big deal. They are deliberately targeting teens and it's quite sickening.
If you work at one of these companies it's the same as working for a payday loan company. You are making blood money.
I've seen a lot of YouTube ads recently for illegal gambling apps
where did the lear about this?
Love it here, only sane state there is these days. Everywhere else is either brain dead, too hot, or too mean
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There's plenty of legal gambling in Minnesota. To quote the Minnesota Legislative Reference Library it includes
"horse racing, a card club at Canterbury Park, Indian tribal casinos, charitable gambling, and a state lottery."
(https://www.lrl.mn.gov/guides/guides?issue=gambling)
There might be a couple more, but there is far less legal gambling in MN than anywhere else I've been in the US (though I have not been everywhere in the past 5 years, and I assume laws have changed enough to ignore experience older than that).
Indian tribal casinos are only legal because they are in a separate country as far as the state is concerned. (they don't bother, but each reservation has a good case to join the UN if they wanted to)
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Tribal casinos are a whole different situation given their legal sovereignty.
If you're talking Minnesota its scratch offs and bingo all the way down.
Excluding tribal casinos like Mystic and Grand Casino, MN has Canterbury, Running Aces, bingo, pull tabs, and the state lottery. Horse racing and poker rooms at Canterbury and Running Aces, IIRC no limit betting is not allowed in poker.
Do explain the Somalia connection you perceive. Please, go on…
Here's some troll food for ya: he's reaching Hacker News level of "noticing"
/s
Doesn’t this violate commerce between states, effectively?
It does, but the constitution's already been shredded and it's dog-eat-dog in the political space right now, so we'll see how it goes.
SCOTUS will probably soon rule that extracting wealth from alienated gamblers is a fundamental American right, that the founding fathers had in mind when drafting the constitution.
No.
They're not banning prediction markets from out-of-state, they're banning it entirely. A state cannot ban out-of-state alcohol, but it can ban alcohol outright if it wanted to.
It would be good if they banned Learing Centers.
They do ban fraudulant learning centers...
If a prediction market uses AI will this violate the federal ban on states impeding AI?
Using AI to identify the ideal neighborhoods to sell meth in doesn't mean it's legal to sell meth.