Matt Levine’s Money Stuff: You Can’t Bet on Little League

Prediction market regulation

For a while, sports betting in the US was regulated by state law. Some states banned sports betting; others allowed it under various regulatory regimes. But then Kalshi, the prediction market, started offering sports gambling nationwide and claiming, mostly successfully, that it was exempt from state regulation. Kalshi is a commodities exchange registered with the US Commodity Futures Trading Commission; its theory is that (1) sports bets are a sort of commodity “swap” subject to CFTC regulation and (2) the CFTC has exclusive jurisdiction to regulate those swaps. The states can’t regulate Kalshi, because the CFTC does. ...