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I just saw a news story (https://www.abc4.com/news/local-news/utah-gambling-sports-law-kalshi/) that surprised me and thought of sharing here...

According to this article, In some places where gambling is completely banned, people can still legally wager on sports without breaking any rules. It’s done through prediction markets, platforms that treat bets as “investment contracts” instead of gambling.

So even in places with the strictest anti-gambling laws, players can still legally bet on sports outcomes, spreads, and even non-sports events like elections or weather.
No VPN, no bypassing, no offshore sites, etc..... Just a legal workaround that fits under federal regulations.

For those living in countries where gambling is banned, check out if Kalshi (https://kalshi.com/) is serving your area.

No RNG gambling though (slots, dice, etc...). You can't create a "investment contract" on what color (red/black) will get pulled out from a livestream... or can you? ;D

That's why Polymarket and Kalshi and exploding, with Polymarket getting a $2 billion investment from ICE (NYSE). There's more to it than betting on sports, basically betting on anything in the world.

Kalshi and Polymarket are the new of legal betting. They know what they are doing and are indirectly taking the sports betting market away from the casinos. Now gambling can be banned in a country, but the citizens who know about Polymarket can still be a bettor practising engaging through other means. The ones who will be most affected are the slot players who have no room for them as such.

This is an interesting get around on gambling although it's only doable in sports gambling as slot games and the rest can't be treated as an investment in any way I can see so if you are that kind of a gambler then you still will not be able to place bets through this means but for sports lovers who want to place bets on the outcome of the favourite teams, gambling has been made easier for them through this.

To be honest, I really admire countries where gambling is banned, because you can consider that as a sign that the leaders of that country have great concern for their citizens.
Meaning, the leader of the country manages it well.

Unlike here in our country, where the promotion of online gambling is widespread. What’s worse is that even illegal gambling is being promoted by useless influencers who promote
it here in our country. Their deceptive promotions are very rampant, and so many lives have already been ruined by gambling because of these social media influencers.

I have seen many scam casinos with bad reputation here doing promotion in my country and the worst of it all is that well known celebrities are the ambassador's they are using for their brand promotion and I guess most of them have no idea what goes on behind while they are doing their promotional campaign for their brands. What baffles me is that this same casino with bad reputation is mostly patronised by players because of the influence of the celebrities promoting them and they end being scammed by the casino without any knowledge of what we here know about the casino. And this keeps repeating itself all over again and players keep on being scammed by the casino.

I guess that's the downside of it, no slots, but like prediction market that really also gaining so far specially when it covered the Trump candidacy for President in the US. Your betting games is limited to this so called markets.

Not be good for those who love sports betting, but a gambler is a gambler, so he might go with it just to get around gambling as there are now a legal loophole that they can take advantage of.

That is good for those who want to gamble but gambling is prohibited in their areas. But they must accept the consequences if authorities catch them gambling. That is because their areas prohibit gambling so the authorities may search for the possibility of their citizens playing gambling and warn them. But I am sure that they can search online casinos that they can access even if that means they will break their prohibition. But I bookmarked it. Thank you.

It's a smart move to bypass regulatory restrictions. Prediction ventures like Polymarket and Kalshi are under the supervision of the Commodity Futures Trading Commission, which is a federal agency. The state laws cannot override federal laws, which has made these platforms untouchable.


The government should regulate the nature of advertisements and seek avenues to protect citizens from exploitative tendencies. Banning gambling outrightly will give room for illegal gambling companies to easily penetrate the market.  

Technically it fall to gambling, betting itself is already gambling, except the countries separate between gambling and betting. I think the country have a poor law too, they still don't have a law to forbid gambling on a project which mainly not for gambling.

I'm sure government don't care whether their citizen gamble or not even gambling is prohibited in their country. They won't catch small bettors because the number of people who break this rule is high and they have no urgency to catch them.

Which country is that if I may ask? I don't blame those influencers, they are finding means to get foods on their tables too, fool me once it's your fault but fool me twice it's all my fault.

A gamble is not enough to destroy your life, but constant gambling is the reason why many people have no hope anymore, they ended up selling everything they have worked for simply because they somehow believed that gambling will work out for them.

They are complete fools, you failed many times as a gambler and you still can't figure it out, gambling isn't the problem, what people choose to believe in them is the problem, you can't keep throwing money away without thinking, the two times I lost money gambling was enough to correct my thinking faculty about gambling.

No one thought me to adjust my gambling strategy and also change my mindset about gambling.

If gambling is banned in a country while prediction market is allowed, all sports bettors will cross over to that new area and the only people that will be left behind are casino players. I'm still studying the reason why a country will ban gambling ( which should cover casinos and sports betting) but allow prediction market. Maybe there some be something that makes prediction market good in the eyes of any law which is why Polymarket is flourishing.

Good for gamblers who are in a country where gambling is restricted. Anyway, this reminds me of this video from YouTube "Exposing the Gambling Epidemic (https://www.youtube.com/watch?v=9Ii1ROzeSwU)" that was shared here in the forum a week or so ago. Basically, these platforms found a way to bypass the geographical gambling restrictions by branding themselves as "prediction markets". Also, apart from being able to bypass the geo restrictions, they are also able to bypass age restriction laws(at least in the US).

Polymarket created a very good product at the right time; they had good vision

I don't know if everyone is familiar with the English betting market, which is famous for allowing bets on practically anything
They managed to bring this market online and even managed to incorporate crypto + decentralization

This is another indirect way of dominance since some countries ban gambling site and not banning predictions market, of course they would definitely takeover in such jurisdiction because casinos won't be able to operate in those regions and it's another selling points, don't be surprised if most casinos noticed this they wouldn't mind migrating into predictions market just to have that license of operation on those countries where gambling is gambling is banned, and we could see the influx of more predictions market before from now till next two years to three years to come just to remain relevance in the field of gambling.

It beats me too, I wonder why sports bet will be banned in a country but you can predict the same games on a prediction site in the same country and it will be legal. I won't be surprised if any government that is very serious in banning sports bet will also in no time ban it in prediction sites because I don't see any different. Anyway it is opportunity for bettors in countries and cities that ban sports betting, they can place their bet in the name of predictions. Maybe prediction sounds better in the ears of bet haters, perhaps predictions and investment doesn't sound offensive to them, whatever it is let bettors continue to take advantage of it while it lasts.

The most important thing to note is that prediction market is considered trading platform and the government doesn't ban trading platforms because they believe you can use some of the controlling features to limit your self on your money management like stop loss which is absent in gambling platforms. Prediction market looks like interecting with real life events that is not based on luck example is politics, business, sports, world events and context like miss world, Oscar etc are not luck based. But gambling especially casino games like slot, dice, plinko etc are based on luck and government doesn't depend on luck because it is not a variable the ascertainable.

So it is clear that the target to ban gambling in such countries is not because of sports betting because you are allowed to predict sports outcomes in prediction market like polymarket but you can't find casino games in prediction market. Therefore, reasonably, the target is on casino games because it is majorly luck based.

This only applies to sports betting, but at least there’s now a way to make betting legal through this kind of platform. I’ve heard about this already. First we had Polymarket, but now this one is actually licensed in the US, got real investments, and they’re expecting to grow big in the sports betting industry.

Good news for people in countries where gambling is illegal, no casinos, no slots… at least sports betting is still possible, and honestly I believe it’s the biggest market among all forms of gambling.

It’s only a matter of time. If government of those countries were gambling is banned come across this or discover something like this they’ll most likely still take action against it, even if they are unable to make it stop functioning in their country they’ll simply make it illegal to use it the country.

For now, there seems to be nothing against it, because of how it’s looked at but if they keep evolving and keep expanding adding more things to their platform, I’m sure it will get to a time when it will become very difficult to distinguish between them and an actual gambling platform.

I’ve since stopped using platform like Kalshi and polymarket so I really don’t know what’s happening there at the moment and things that you can predict, so my response might be off from reality.

That could be true, but I don't think that that is what's happening or going to happen, other countries that allows sports betting still have a large population from those countries who are using sports book. If care is not taken, there is how things can change in those countries that ban gambling, they would still ban poly market. Once country already did that and a thread was created in regards to it but I can't find the thread.

This is on gray area for now but any country with strict restrictions to gambling can include betting market as scope of their gambling restrictions law in the future once this loophole was heavily used to bypass their law.

Polymarket already have an issue about this on US before because they are trying to use this loophole so.

The title should specifically indicate that this is for sports betting only.

They have every right to ban Polymarket since it doesn’t have any global license. But Kalshi is different. It’s a competitor of Polymarket, but it actually has a license in the US, so that’s the big difference between the two. This platform will likely dominate because it has the credibility and it’s operating legally.

Nothing will stop gamblers from gambling. Even if the platforms treat bets as "investment contracts," that is still gambling. The regulator may not think that is betting especially if they are not familiar with it. The regulator needs to be active to investigate this or they will be late to realize that the bad effects happen to their people.

That will give them a chance to place their bets. They will not be afraid if that breaks their law because that loophole helps them to still playing  gambling.

Although gambling has been banned in various countries, it has not been completely stopped and it will never be able to be stopped. Gamblers will gamble in one way or another despite the obstacles. With the passage of time, the common people are becoming more attracted to gambling. This may be due to various reasons such as excessive greed and the hope of getting rich quickly. However, I think that gambling should be mainly for entertainment purposes. By expecting more than this, the risk can increase manifold.

The government can be so foolish. If they want to remove anything betting, they should do so, including polymarket, kalshi, and exploding. None should be left to operate within the region. What they don't know, or perhaps they know but are acting ignorant to, is that they are only enforcing the law on sports betting and casino platforms. What is the essence of a bettor can still bet on games legally.

The website you mentioned is also banned in India, just like poly market. ::)

So I don't know using VPN and making a bet is still legally right?

However, crypto casinos are accessible with no issues and government haven't sent any notices to ISP to block them from their customers but they did that for crypto exchanges.

The question now would be, what about places where the prediction market is banned, like the website is banned or restricted in a such a manner that the citizens can't access the site except they introduce the use of VPN to bypass the restrictions, can we still assume that citizens who do this are still lagally gambling?

The thing is, If I stay in a city where gambling is absolutely banned, then I have no business becoming a gambler in the first place as becoming one could simply be me exposing myself to risks that can be totally avoided..
But maybe haven't become a gambler before gambling in that city got banned, then I will either quit or move to another city where gambling is allowed.. Using prediction market for sports betting won't give the same feeling as actual betting on sports through casinos.

In the legal profession, they call these legal loopholes lacunae. Laws cannot be perfect, that's why there will always be amendments. These prediction platforms are simply taking advantage of the loopholes in the US law. I trust that the state legislative arm might seek means to block this lacuna, or they might approach the court.

Though, even though you have that personal perception of leaders in countries where gambling is completely banned, you also need to keep in mind there is much value in allow people to do whatever they want with their money and also there is much value on allowing people whatever they want (as long as they are not hurting anyone).
For example, people have thought it would be beneficial for the people of the United States if the government of that country made some junk food and beveraged forbidden for human consumption, so the rate of obesity in their society would decrease, so would heart illnesses, but people in the end, have the right to consume whatever they want.

It would be similar to banning cigarettes, people and the government know they are bad for health, but people understand the risk and choose to pay their taxes to buy them. (Tobacco taxation).

Never heard of Kaishi until now, but Polymarket, yes. So both are prediction sites. They’ve been getting attention lately since almost everything that can be predicted is being included there. Honestly, I haven’t visited either of the two, but I’m sure they will take a slice of the pie in the betting industry sooner or later. There were even months when I kept seeing Polymarket everywhere, even with nonsense predictions. Lol. Now because of this, maybe I’ll give it a try soon.

In my country, gambling is prohibited, and the government has emphasized this, yet many people still gamble. Furthermore, online gambling now makes it easy to access anywhere and anytime. Although this opportunity doesn't serve my country, I suspect many people will still gamble.

I believe this is due to the difficulty of finding work, and those frustrated with the job search are looking for ways to make money quickly, whether through gambling or trading. However, in my country, although the government prohibits gambling, they are not firm in handling these cases. It could be said that each individual gambles individually. The government allows people to gamble, even though the warnings are only gentle warnings, so they don't have a significant impact. This may even apply to their leaders.

People find workarounds for them as well. Even in countries where gambling is generally prohibited or illegal, you can find mobile apps and websites where you can do gambling, and you can fund your gambling account with mobile wallets that are operational within the country. In my country, the same is the situation. Gambling is illegal here, but there are so many gambling apps and platforms available for android and iphone users, and there are even websites where one can play without downloading an app.

You can play slots, dice, fish games, poker, roulette, and even do sports betting in some of the platforms that allow it. Basically, you can do all sorts of gambling without having to do KYC or anything like that. If you win, you can withdraw, maybe not very large amounts, but small amounts won't require you to do KYC or anything like that. It's a crazy world we live in.

But do they do that illegaly?

The thing is that Polymarket is a legal way of gambling on sports, even when gambling is forbidden by law.

Your country might say slots are illegal but someone launches one anyways. The problem is that someone powerful enough can launch attacks and try to shut it down, or keep the money on the traditional banking system (i.e the accounts of the partner accepting the deposits and processing withdrawals). :P

Truly so gambling can be indeed be banned in many countries I wonder because the way gambling is going in my country I don't think if they will banned gambling because many are doing it as if is their own ,do you know that people fight in the gambling sites , making some kind of utrance just because of gambling but if the fight continues and more killings I believe the president can banned gambling if all this continues but if it doesn't I think people will continue to gamble.

But if gambling is banned in your country, then you'll also have to stop participating in any signature campaigns. One of the biggest problems people have is not looking far ahead before making decisions. Gambling shouldn't be seen as an enemy to be eradicated, but rather something that can be properly regulated, allowing gambling companies to partner with the government. This way, people can gamble, the government can collect taxes, and awareness campaigns could reduce the number of addicted people and prevent further addiction.

Maybe not for long, because in the same article, their existence is being challenged, and many more states join the campaign, they could be out in those states, when gambling is banned in your country, and the government becomes aware of it, they can take legal action to ban the platform. Every country has its own way to do it.
This is the first time I read about Kalshi (https://kalshi.com/)and they could challenge Polymarket's share of the market in this kind of conceopt in gambling

Most of these countries where gambling activities are banned is actually for a reason, the government of those countries are not just trying to dictate and ve controlling they must have seen sowm damages it has caused and that approach is probably the best they could come up with to curb the negative effects it has on the citizens but no matter what they do they can't totally stop people from gambling

We know that even though such activities aren't currently prohibited, that doesn't mean the government won't catch wind of it and enact similar regulations in the future, making participating in predictions a violation, moreover, if they deem predictions similar to betting, they may classify it under the same regulations. furthermore, many countries are quite strict about cross-border platform operations within their countries, and it's possible that Polymarket and Kalshi will face restrictions, leading players to continue using VPNs, which would still be illegal.

This looks like Polymarket predictions. I don't like this kind of bet, it's not like the traditional one you can bet and do everything you like. This particular website is too centralized by government, not even a company. The government is going to watching you, no matter how they try to make this look, they will never allow it looks like the traditional casino and play other games, it's not given you the vibe of full travel especially one that response.

I don't mind the government taxing me, I don't mind them doing their job but they should allow people to gamble and enjoy their usual casino. If there is no financial concern, health concern but there is addiction concern, this can be controlled through other means like allowing small deposit and restrictions of large deposit. Any casino that want to provide service must be fully registered and incorporated with the country, this is better than that Temu gambling website.

Laws may not be perfect, but they can be amended to achieve a goal, right? This is where I still call them a fool, because they can make new laws that will restrict other companies from taking advantage of the law they made. Is it not easy for them to do so?

Let them keep focusing on what's not important, rather than creating opportunities for youth in the society.

Gambling is not banned in our country, so people here can play on the new prediction market. But if gambling is prohibited in one country and it has one site where its citizens can play legally, the country can, based on its existing laws, adjust its laws to include any platform that allows its citizens to play.
Because the government understands that if they allow one platform that lets their citizen play, then the gambling ban is useless

If a country bans gambling but still allows even one platform to operate legally, it creates a loophole big enough to undermine the entire ban. Once citizens have any legal access point, the restriction lose the  strength, and the government knows that. And that’s why many countries that ban gambling often try to regulate every platform that touches their citizens, even foreign ones.

The workaround is pretty bullshit. It will be patched up as soon as the gambling lobby on this weakens. Gambling is gambling, no matter in what form or shape it takes. I'm amazed how many people are applauding Polymarket and Kalshi, when they are cancer to society and foster more degenerate behavior. Well, if you don't learn the lessons in theory on why this is bad you will suffer the consequences and maybe learn your lesson then.

No, it does not. Generic bullshit like that does not work. It would be as saying as long as there is 1 tax loophole, taxation laws are completely undermined. Meanwhile in reality most of the sheep are paying their taxes as they have been programmed. In this particular can it does not undermine anything. You still can't access slots or any traditional gambling that is prohibited. You can access only a new retarded form of gambling, temporarily. 

The Binary Options and CFD Market including the cryptocurrency and NFT bets in countries like turkey, Indonesia, mainland China, UAE and some parts of southeast Asia use these platforms to hide the illegality of gambling activities acting as legal loopholes.
They instead focus on making the users and the regulators believe that their service and products meet the criteria to qualify as a financial instrument which is the loop hole that is explored and prevents penalties or prohibitions that would have normally been served to those caught contravening the illegal gambling rule.

Fortunately, gambling activities isn't banned in my country but I was thinking that the Polymarket happen to fall into this category of legal loophole that gamblers can use to place bets in countries or regions where gambling is a banned activity openly.

But until that actually happens, people will keep enjoying it by finding ways around the law. This just shows bettors aren’t dumb, they’ll always find a way to do their thing. And of course the companies offering the service will lead the way, that’s just basic business principle. When you solve a problem, you earn the reward, and that’s basically what Kalshi is doing here.

Countries can easily categorize it as a form of gambling; they can even expand their definition of gambling to suit their preferences.
There are no loopholes in the gambling ban that they cannot fix. When they say gambling is banned, they can change the category and include what they deem risky for their citizen.
If they see their citizen will incur substantial loss, they can act on it, even with just one report, which is enough to include it.

There is a downside, however, when a country prohibits gambling. The country would be missing an opportunity to earn billions of dollars of revenue annually due to the taxes that they can levy from regulation and requirements.

I do agree that if a country absolutely prohibits gambling, it is a sign that they are well-developed and established. The fact that the country intentionally does not want to enter the gambling industry for the benefit of the welfare of their citizens is commendable.


Wouldn't this "legal loophole" be explored by the lawmakers given them inquiry so that they can create laws in aid of legislation specifically for this topic? I believe that if you try to create a legal loophole just to bet, this would backfire immediately especially if the very essence of what you are doing is technically gambling but on paper it's investing into a financial instrument.

In my country, gambling is one of the most difficult tasks for the government to overcome. Even though there are laws regulating gambling and violators are subject to legal sanctions, huge amounts of money still flow to online casinos. Therefore, the government has made a ban on gambling detrimental to our country. It would be better for the state to accept and collect taxes from it.

This is a hilarious loophole lol governments are so slow

"It's not gambling officer it's an 'investment contract' on the weather"

I'm not betting on the Lakers I'm investing in the probability of their victory haha

Zlantann and rdluffy nailed it Polymarket and Kalshi are just playing the game smarter by using federal CFTC rules against the local state rules

It's just semantics at this point

But yeah like everyone else said this is awesome for sports bettors and people who want to bet on elections but it does absolutely nothing for the rest of us The slot and dice players are still stuck using VPNs I guess You can't really make an "investment contract" on a slot spin lol what a bummer

Still a super clever move by those companies though I gotta respect the hustle

this kind of legal loophole happens because some platforms do not call it gambling! they call it prediction or investment. but at the end of the day it is still the same thing you are risking money on an uncertain outcome even if it is allowed under certain regulations, it does not change the fact that you can still lose money just like normal gambling. people should be careful and not think it is completely safe just because it is legal

Many countries have already classified prediction markets as gambling and therefore platforms offering these options are not allowing users from certain jurisdictions to participate.

For instance my country was very fast to ban pokymarket. For any government it's very profitable to be in cooperation with so called licensed casinos in order to keep part of their profits. Any other form of gambling can be considered lost revenue so governments are often very aggressive against it.

From what I see, it seems the same since you'll be trying to predict an event using money. It's best to avoid any problems because if you get caught you could be punished by the betting or prediction site, or even by the regional government.

These "workarounds" are likely temporary, as regulators (who ban gambling in their own countries) won't allow this loophole to gamblers and will instead embrace new, industry-correcting gambling prediction markets in a new packaging. This is happening belatedly, but it will inevitably "catch up" with everyone who bets. But by then, gambling will likely find a new "incarnation in a different packaging" This cat-and-mouse game continues as long as bets are profitable.

Well, I support any country that banned gambling even in my country gambling is not legally allowed though rich men have handouts were then played gambling but to be honest I dislike gambling because I kills ones good prowess and destroyed your years of hustling, some to the extent of selling their properties in order to continue staking and gambling. Secondly sport betting as should be down people who have good understanding of football and used spare money to bet if they must because betting is betting it can still dry your pocket if care is not taking.

Oh, now I see, but regardless do you think or say it's going to dominate over all other sportbookies or you are just making reference to polymarket? If it's about Kalshi taken over the market from polymarket, it's likely going to happen but I don't think it will also dominate over all other casinos and bookies.

i think people are tired of ordinary betting terms and want to try crazier things. while betting types, odds, and events are completely in the hands of the betting sites we are used to, here people can proceed according to their own preferences. that's why sites like polymarket and kalshi are rising so quickly.

beyond that, these sites even let you see which way polls and political events are leaning. that's incredible because it clearly shows how much people are betting on what. i haven't used one of these yet, but i'm thinking of trying one soon.

Who’s tired? lol. We still prefer the sportsbook type, but the reason some gamblers choose platforms like Poly and Kalshi is because they can place bets without much hassle. Using a VPN is risky, but if there’s one option that feels safer, then of course we go that way.

Also with Poly, there’s no KYC needed since it’s a real decentralized prediction market, so we have that freedom to bet without worrying that our funds might get traced or that we’ll end up paying taxes or getting sanctioned for violating some law.

This scheme works until the first trial/law enforcement claims. Perhaps in some countries the rule that if the letter of the law isn't broken, everything's fine still applies, but in most countries, this no longer applies. A court can classify your actions A as B, even if they aren't formally considered actions A. The court simply declares that the essence of your actions A is actions B, and therefore you are committing an offense.

I’m talking about beating Polymarket in terms of competition. I still believe the popular sportsbooks will stay on top, and Kalshi won’t overtake them unless they come up with something really strong, like VIP transfers or some big advantage like that. Reputation takes a long time to build, and their sports betting feature was only added recently, so they’re still at the bottom, or maybe middle at best, when it comes to competing in the sports betting industry.

No matter how many prohibitions exist, it will always be a cat-and-mouse game, it will never end, because it's very easy for a casino to create a mirror of its website to attract more and more players. The ideal solution for this is taxes on casinos, because it maintains gambling and the state is happy collecting more taxes (although I am totally against this, the state interfering in people's fun).

The government can bring various rules and regulations to stop gambling, but gambling will never be completely stopped or cannot be done. No matter how strict the government brings in rules, gamblers will bet in any way, people actually think that gambling can be a quick way to make money, in fact this mentality can lead to a completely wrong direction. So no matter how hard the government tries, gambling will never be completely stopped.

Yeah, that is an alternative way for those people in countries where gambling sites and casinos are banned, so they can bet in that way. However, when it comes into conflict with religion, this alternative also does not work because religion fully prohibits any kind of betting, and the same applies to the laws of the state. In my country, Kalshi does not work, if someone tries, they will be blocked directly, and if they use any kind of third-party access, they will face legal penalties if found.

When something has been overused, the government will start to notice it, and they will try as much as they can to stop it. If Polymarket or any prediction platform indirectly provides the same service they ban, they will either ask them to stop or revoke their licensing unless they give it another name and definition which will make it appear like they are not promoting or serving what appears to be banned.

You've made a valid point here. Gambling is gambling no matter what platform is used for that purpose. I just don't get it why the government will choose to monopolise only one gambling site while tagging the rest illegal. I am forced to believe that the one legal site is government owned  ;D


The entire restriction thing is just pointless when the citizens still gamble freely. The government has only one option; it's either they restrict gambling completely or make gambling legal but regulate it properly. Anything far from these two options is totally pointless.

This is only half the truth, most countries that bans gambling are influenced by their religion and not of the concern of their citizen.  You can search the internet on countries that banned gambling and will find out that it is in relation of that country's main religion.


Hasn't your country already issued a notice on stopping these influencers who promote illegal gambling?  I read that these people who are involved in promoting illegal gambling will be punished according to the country's law.

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It is quite brilliant to have an idea like this, making betting as an investment contract.  I wonder whether the regulatory board will patch up this loophole or just let it go since they are able to make money out of this go-around method.

From what I've researched, this "legal shortcut" is actually more specific to the American scenario, right!? These companies register as a derivatives exchange, sell bets on sports and events as if they were regulated financial contracts and then try to escape gambling laws... in practice, you are betting on the results of a game, but with a legal label.

Here in Brazil, the problem was never the lack of a loophole to bet, but rather the gray market that allowed betting on offshore sites without any protection... nowadays we have regulations requiring licenses, taxes, advertising rules and some obligations to protect consumers. I think that should be the way forward... instead of looking for loopholes, try to pressure governments to regulate.

I think it is very dangerous to confuse gambling with a financial product, just as many people still confuse day trading and pyramid schemes with "guaranteed investments".