CFTC Defies Court Order, Directs Kalshi to Operate in New York
FlatRigor 5210 sources
The Story
The Commodity Futures Trading Commission (CFTC) instructed prediction market giant Kalshi to continue operating in New York, defying a federal court order. Consumer advocacy groups accuse the Trump administration of lawlessness on behalf of well-connected gambling interests. Benjamin Schiffrin, director of securities policy for Better Markets, stated the CFTC believes that the law does not apply to it. New York sued Kalshi late last month for allegedly running an illegal gambling operation, seeking a court order to stop operations, fines, forfeiture of illegal gains, and restitution to users. A federal judge denied Kalshi's bid to prevent New York from enforcing its gambling laws weeks ago. The CFTC, led by Trump-appointed Chairman Michael Selig, asserts sole regulatory authority over prediction markets and previously directed Kalshi to violate a Michigan state court order. Separately, the New York City Council is investigating Kalshi, Polymarket, Coinbase, and Gemini Titan for alleged deceptive and predatory marketing practices targeting young people and potentially minors. Council Speaker Julie Menin notified these companies of the investigation on Tuesday, referencing troubling news reports. Polymarket allegedly paid influencers without disclosure, produced videos showing fake trades, presented losing bets as winners, and encouraged insider trading. Menin stated the council intends to harness the full power of the Council to protect New Yorkers. The council's inquiry is not exploring whether event contract exchanges violate New York's state gambling laws. Prediction markets have grown into a $240 billion-per-year industry. Sequoia and Wellington are in talks to back Kalshi at a $40 billion valuation. Kalshi is also offering a referral code "OREGONLIVE1" for up to $500 in bonus credit for new users.
The Spread
Flat
What they agree on
- The Commodity Futures Trading Commission (CFTC) instructed Kalshi to continue operating in New York, defying a federal court order.
- New York City Council is investigating Kalshi, Polymarket, Coinbase, and Gemini Titan for alleged "deceptive and predatory" marketing practices.
- New York state has an ongoing lawsuit against Kalshi, Coinbase, and Gemini, alleging they are running illegal gambling operations.
- The CFTC asserts sole regulatory authority over prediction markets, seeking to prevent states from regulating them.
- Prediction markets are a $240 billion-per-year industry.
Where they split
- Common Dreams focuses on the CFTC's instruction to Kalshi to defy a federal court order, framing it as "lawlessness," while other outlets primarily cover the New York City Council's investigation into marketing practices.
- RT (Russia Today) provides specific examples of alleged insider trading within the prediction market industry, including a White House staffer and a US special forces soldier, which are not detailed in US major outlets like The Washington Post or CNBC.
- The Oregonian articles focus on Kalshi's promotional codes and sign-up bonuses, providing instructions for users, a detail not emphasized by other outlets covering the legal and regulatory challenges.
- CNBC and The Wall Street Journal mention New York state's ongoing litigation against Kalshi, Coinbase, and Gemini for illegal gambling operations, while the New York City Council's memo explicitly states its inquiry is not exploring state gambling laws.
Source Perspectives
Left1 source
Center9 sources