Prediction markets legality as gambling or derivative trading platforms, & rules

[noorman0]

South Korea has indeed blocked access to Polymarket, but it should be noted that this does not apply to all prediction markets in general. In general, the decision concerned only this service, and it was deemed a form of illegal online gambling within the country. As far as I remember, there were no restrictions on other similar services.

Yes, it was a specific ban; I recall that several European countries also banned this particular platform because its operational structure was deemed incompatible with the financial infrastructure of many jurisdictions.

Then again, it wouldn't be the number one platform if it didn't have its share of controversy. Lol

[Localhostspeed]

You are correct, that is what prediction markets are and they give it a new name called prediction markets. But they moved towards the regulators that regulate trading.

Also what will you call trading? Do you know that some people can argue that trading is also gambling? You bet on the price of something to either go up or down, but you do not see the future.

With the way prediction market will be as I am seeing it, it will later be seen as trading, although it is prediction market.

I think that legality of predictions market, gambling and any activities that regulate them depend on who is offering that service. For example, people will say future trading is gambling, basically looking at it there is some sense in their but future trading is a contract between two people to predict the price of trading pair and as such, only Security exchange commission can handle such activities. Likewise if it's prediction market, since it's has to do with non exchange predictions, it can merge with gambling.

Prediction market is this way because the trend stated from crypto project. I still believe one of the biggest crypto prediction market is Polymarket. They have a parent company called polygon and it's a crypto market and that is why the regulations is SEC concern. They have accused many prediction market to be doing insider trading and enabling laundering. Maybe that is why casino don't want to start prediction market.

[acroman08]

I posted a couple of weeks ago about Connecticut suing Kalshi, and right now(several days ago), Connecticut has sent a cease-and-desist order to 9 companies that have sports prediction markets on their platform that allow Connecticut residents to participate.

From the looks of it, Connecticut is not specifically targeting prediction market platforms, but platforms that offer sports event contracts.

If anyone is curious, here's the list of the companies that received cease-and-desist orders. And if you are curious why Kalshi is not there, it's because Connecticut already dragged them to court.
Polymarket
Coinbase
Crypto.com
Robinhood
ProphetX
Novig
Webull
Gemini
Underdog Predict

source: https://www.actionnetwork.com/news/connecticut-prediction-markets-cease-desist-orders-sports-betting

[acroman08]

Prediction market news coming from New York again. They just filed a lawsuit against Polymarket on Thursday. From what I understand, the reasoning behind the lawsuit New York filed against Polymarket is basically the same as the one they filed against Kalshi, and yes, New York is also asking Polymarket to "forfeit all illegal gains and pay restitution to users", just like what they ask Kalshi to do.

Also, according to the article, Polymarket retaliated by filing a lawsuit against New York, claiming that the state is "overstepping its authority to police a federally regulated exchange".

https://financialpost.com/investing/new-york-sues-polymarket-illegal-gambling-business

[Localhostspeed]

Great, I hope more countries will follow, America is the major pusher of these prediction markets and they are not healthy, trust me they are backing nonsense because they want to make money.

You know what's even annoying about this things they push, it's always where they can manipulate and benefit. Most often, prediction market is full of events that can be manipulated that's why they are enabling what's bad. Most the events in predictions market are related to US politics which they can turn in their favor. Poor people will continue to lose and insider will continue to make money.

If someone like Hunter can release his own meme coins and said he plans to make money with it then it says it all, America will back any nonsense if they can make alot of money from it.

I expect south Korea to be on that list even before reading OP, some countries won't do some things even though they can benefit for it, they will always put humanity first before money, not America likes.

I went through some of Hunter recent and it's look like man has cashout his millions and will go his way. The meme coin is dead, the price is not looking attractive, I doubt if there is liquidity at all. Although, I like how everything is turning out. At least, people are seeing the kind of people they are and not as they tell people. Many other people have done this and went into hidden, the same pattern over and over.

[Swordsoffreedom]

Prediction market news coming from New York again. They just filed a lawsuit against Polymarket on Thursday. From what I understand, the reasoning behind the lawsuit New York filed against Polymarket is basically the same as the one they filed against Kalshi, and yes, New York is also asking Polymarket to "forfeit all illegal gains and pay restitution to users", just like what they ask Kalshi to do.

Going after Kalshi, targeting Polymarket was only matter of time.

I think New York is basically directly challenging CFTC's jurisdiction.

If prediction market are classified as derivatives or financial contract under federal law then due to federal preemption shutting them down solely by invoking state gambling laws becomes quite complex.

NGL, Polymarket filing countersuit in response to New York case seems like pretty expected and logical move to me.

[Texac]

I think that legality of predictions market, gambling and any activities that regulate them depend on who is offering that service. For example, people will say future trading is gambling, basically looking at it there is some sense in their but future trading is a contract between two people to predict the price of trading pair and as such, only Security exchange commission can handle such activities. Likewise if it's prediction market, since it's has to do with non exchange predictions, it can merge with gambling.

Prediction market is this way because the trend stated from crypto project. I still believe one of the biggest crypto prediction market is Polymarket.

I think real issue is classification.
Line distinguishing prediction market as either gambling or financial instrument is becoming increasingly blurred.
But regulation depend not only on who provide service but mainly on how that particular product is legally classified.

For example in US, futures and other derivative mostly fall under the CFTC rather than the SEC. Prediction markets can also fall under CFTC regulation if their contract are considered event contract. And in my opinion, this regulatory uncertainty really could be one of the reason why regular online casino are cautious about adding prediction market.

[Smartprofit]

It's understandable that bureaucrats want to regulate everything. It's a favorite pastime of bureaucrats around the world. 🙋

At the same time, prediction platforms, in my opinion, represent a completely new and unique phenomenon. I wouldn't classify them as either classic gambling or classic digital asset trading (although I admit they have some similarities). However, they are also similar to media and are a new tool for hedging business risks. They also have a very important social significance, as they act as oracles of truth in our world full of fakes and deception.

As for decentralized platforms like Polymarket, I believe it's a very interesting social phenomenon—a platform where players compete against each other. Since the most successful of these players are insiders and highly skilled experts, truth is born out of their gameplay and competition.

Governments really don't like this, and neither do officials, and I think the phenomenon of independent prediction platforms will soon either disappear completely or undergo significant changes. And that's very sad. Because this is a fundamentally new type of gambling, at the intersection of other social technologies. 🧑‍💻

[Yorubek]

The reason why these countries have ban the prediction market, and gambling is what I don't really know, and they might also have different reasons for initiating such action. I believe there is no country that one for of gambling or the other is not taking place, and I equally believe in these countries which are given law to stop gambling, some persons will still be gambling maybe using VPN. However, gambling can be addictive most times, and that could be the reason why some countries are banning it, and even at that some countries are also using gambling to generate job opportunities, and create income for their own countries for instance the European countries, and if you ask me, I prefer a more regulated gambling instead of stopping it entirely, because even if you feel some gamblers are abusing it, there are also responsible gamblers who in one or the other benefit from gambling too.

The reality is that the government can completely stop gambling if it wants to, but it is never possible for the government to completely control gamblers because the government can make strict laws on gambling, but gamblers will gamble by taking other way, avoiding the government's eyes. In countries that have banned gambling and prediction markets, the government may have taken this step to control gambling addiction, but it is not possible to completely reduce the addiction by stopping gambling because gamblers will bet in any way. I think it is very important to focus on making strict rules so that the harmful aspects of gambling can be controlled, rather than completely stopping gambling or prediction markets.

[Queen uloma]

Prediction market is not gambling neither is it trading, so those that will be going for it should be well prepared for the risk that is associated with this, I will also support the government when it comes to things like this to be banned because of the danger and risk that is there, while the process has no reliability.

My own opinion is, whether it’s called gambling or trading, predictions market still has serious risk. So anyone that wants to go in, should understand the risk involve, because there is no guarantee that their prediction will come true. I support proper regulation to reduce the danger that comes with it.

[Yeesha]

Prediction market is not gambling neither is it trading, so those that will be going for it should be well prepared for the risk that is associated with this, I will also support the government when it comes to things like this to be banned because of the danger and risk that is there, while the process has no reliability.

My own opinion is, whether it’s called gambling or trading, predictions market still has serious risk. So anyone that wants to go in, should understand the risk involve, because there is no guarantee that their prediction will come true. I support proper regulation to reduce the danger that comes with it.

Some people are falling for it. Predictions are not always right, but some people have complete faith in their prediction, and the reality is not like that. Your prediction can not always be right. At a time you have to experience the opposite of what you expected. Prediction market is not gambling, neither is it trading but it contains a higher level of risk just like gambling. A prediction may fail instantly. Every predictor has to maintain boundaries and avoid the things that is going to affect them.

[ColdLava40]

Great, I hope more countries will follow, America is the major pusher of these prediction markets and they are not healthy, trust me they are backing nonsense because they want to make money.

[
You know what's even annoying about this things they push, it's always where they can manipulate and benefit. Most often, prediction market is full of events that can be manipulated that's why they are enabling what's bad. Most the events in predictions market are related to US politics which they can turn in their favor. Poor people will continue to lose and insider will continue to make money.

As long as they stand to gain something from it, they will not want to push any regulations.

We saw heard about the US president selling out his signals on major news on his social for $100k per month? That already tells use more than enough. They have a lot to gain from all these so they will not want to cut it short.

Sooner or later we will begin to realize the effect of having unregulated prediction markets. The whole idea behind it was to me unrealistic, betting on any events when we know that such things can be manipulated.

[Kavelj22]

We saw heard about the US president selling out his signals on major news on his social for $100k per month? That already tells use more than enough. They have a lot to gain from all these so they will not want to cut it short.

Sooner or later we will begin to realize the effect of having unregulated prediction markets. The whole idea behind it was to me unrealistic, betting on any events when we know that such things can be manipulated.

In another topic, it was announced that Ohio to finally enforce law against Kalshi sports market: https://bitcointalk.org/index.php?topic=5595792.0
I think there will be always ongoing battle between many states in United States and prediction markets. And as we can see, there is still an ongoing debate about how to define/classify the prediction market, as it seems not to fit under any category. Not a trade, neither a gambling practice. Regulations will stay stacked under this dilemma is solved.