That claim is coming directly from the CFTC, it is not this user's novel claim.

It seems that overall the CFTC and the NYAG are presenting materially different event time lines, so as an outsider it's a bit unclear what is actually happening.

In saying, "New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide" the CFTC's press release substantially misrepresents the filing by the NY AG. On page 29, the filing requests "Permanently enjoining Respondent and its principals, agents, and employees from operating an unlawful gambling business, or otherwise advancing gambling activity, or profiting from gambling activity, within or from New York or to persons in New York, without being licensed by the New York State Gaming Commission" (https://ag.ny.gov/sites/default/files/court-filings/new-york...).

Since Kalshi's HQ is in NY, I guess the most charitable interpretation is that perhaps the CFTC's statement is based on the assumption granting the TRO would have the net effect of disrupting Kalshi's operations everywhere until they can serve the site from outside NY. Of course, without disclosing that extrapolation, the statement is still factually incorrect.

Setting aside that significant error, I suspect this CFTC order is an attempt to create a federal vs state conflict in the hope the judge will suspend or defer any TRO until that issue is decided. I imagine Kalshi will file a response tomorrow arguing exactly that. Ultimately, this will still come down to whether Kalshi can be regulated by states, and if so, whether it's gambling.

Yea; interstate commerce being the domain of the federal government is one of the more tested legal concepts we have here.

Except it's false, they aren't requesting such a thing.

That's not true at all. New York is asking the court to stop the Kalshi executives, who are located in New York, from flagrantly violating the sports gambling laws of New York. Kalshi would be free to move to another state where sports gambling is legal if they wanted to keep the platform up.

Isn't this how gambling works though? You and I place a similar value of chips on a table, then the winner walks it over to a third party (the counter at the casino) to exchange the chips for currency?

That’s pretty normal though, and has been for ages. A lot of states have random laws around the things you can sell there, even though it would prevent an out of state entity from selling the product there.

Liquor laws come to mind, you usually need special distribution stuff per state.

It would be a wild expansion of the commerce clause to prevent states from regulating what can be sold inside the state.

You are correct, but New York also apparently sees their jurisdiction as nationwide when the thing being wagered on has some proximity to the state. If you read the petition, it has language like this:

> New York also prohibits sports wagering on events in which New York college teams participate

Ultimately, this suit is about protecting state gambling taxes and incumbent casinos. I guess I don't feel a particular love for either side.

Do you have a source for that? From the release:

> In the lawsuit, filed on July 31, New York seeks a temporary restraining order prohibiting KalshiEX, LLC from offering all event contracts nationwide and more than $36 billion in damages.

I (unfortunately) think that the NY AG screwed up our opportunity to press that question by aiming nationally. The CFTC got to skip that and just shut down the national TRO.

I'd love to see another state push for a state-specific restriction and see how that plays out.

The "order" there is effectively a reset button to the TRO. Its function is to say "you can ignore the TRO and continue business as usual". It doesn't force Kalshi to continue operating if they had their own reasons for pausing operations.

Isn't the act of not offering something in NY = to not offering it nationwide?

It's kind of hard to take Kalshi out of this, since the whole premise for the Commodity Futures Trading Commission's authority here is that Kalshi is a commodity futures trading exchange, not a gambling site.

I don't think Casa applies here. A nationwide injunction is not the same thing as a universal injunction. A universal injunction benefits non-parties to a case. But if an injunction, especially a TRO, requires nationwide effect to protect the interests of NY, who is a party, then that's fine. Also note that Kalshi is based in NYC, AFAIU; it's not a situation of a state court trying to control the out-of-state actions of a foreign company merely doing business in NY.

Traditional derivatives can be used to trade the risk that would already exist with or without the existence of the derivatives market. Prediction markets create risk out of thin air.

Regulations, skill, and access.

One is when the president's son is a strategic advisor to the company and the other is a gambling platform

The fact that you can turn useful financial instruments into a casino isn't really a great argument for just leaning into it by abandoning all connection to any real utility.

I don't think I can make a good ELI5 argument for (or against) that one as-written, because there are multiple differences going on at the same time. For example:

1. When you "lose" shorting a stock your potential loss is infinite, because you might be on the hook to buy (and then give away) GOOG at an arbitrarily high price. In contrast, the super-bowl bet is probably a fixed amount.

2. In the opposite direction, it's hard to see how the Super Bowl bet can really be hedging to reduce how much you're relying on chance in your life... not unless you happen to own a store selling single-team merchandise and you want to limit how much money you might lose if nobody wants to buy it.

_________

P.S.: Let's flip it around: If we assume shorting GOOG is the same as sports-gambling, then why (AFAIK) has no bookie or casino ever even tried to offer the same kind of bet, where you get $X now but you're obligated to supply $THING later?

Does that absence tell us something about an important difference between them?

There's a legitimate, non-gambling use case: hedging against your existing position in GOOG.

There's no equivalent instrument for sports.

As far as I can tell, binary options on "GOOG below $300 by February 2028" do not exist in the US market. I absolutely think that single-stock binary options are terrible gambling products and should not be allowed.

The thing that I suspect you're intending to describe, a put option expiring in January 2028 (there is no such contract for February) with a break-even at $300, has a different structure which greatly increases its utility for financial purposes and greatly decreases its appeal for gambling. It's hard for a casual bettor to even identify what the correct product is (it was the $355 strike at close of market today, but it may be different tomorrow!), bets are only accepted in increments of $5,500, and your winnings may be minimal unless Google falls either more quickly or more severely. If I'm trying to hedge my Google exposure, though, I'm perfectly happy with the scenario where I didn't win much because Google didn't go down much.

The US SCOTUS is the single best argument against putting too much into a written constitution.

That's exactly the point, yes - the Republicans have always claimed to be the party of Small Government and of States Rights while in the opposition, but in reality when they are in power they immediately act to expand federal powers, both over the states that they don't like and overall in the economy and day to day life.

The Republicans don't just control the executive, they also control both chambers of Congress (and, lets be real, the Supreme Court as well).

The fact that they don't act like it and just allow the executive to do whatever it wants doesn't absolve them of responsibility for what the executive does.

Legal filings by the State of New York indicate that this was not in fact the case and they were asking Kalshi to halt offering their product to the public in the state of NY only.

False: https://news.ycombinator.com/item?id=49266746

Kalshi is a NY company, why can't the NY AG govern what businesses in NY do again?

> In this case, Congress already passed a law regulating these activities, and it seems pretty clear-cut that Kalshi engages in interstate commerce, so New York will likely lose if this gets to the Supreme Court.

That is a wild take. Interstate regulatory power does not prevent a state from passing laws regulating things happening inside its own state.