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NY sues prediction market Kalshi alleging it's an illegal gambling operation
8 hours ago
- New York Attorney General Letitia James is suing Kalshi, a major prediction market, for operating an illegal gambling platform without a state license or paying related taxes.
- The lawsuit seeks to enjoin Kalshi's operations, impose fines, order restitution, and forfeit profits, citing risks like underage betting and gambling addiction.
- Kalshi argues the lawsuit is political theater, claims it is federally licensed by the CFTC, and warns that shutting it down will drive New Yorkers to offshore platforms.
- The case highlights a broader legal battle over whether state gambling commissions or the CFTC should regulate prediction markets, with conflicting court rulings across states.
- Other states—including Rhode Island, Nevada, Michigan, and Washington—have also sued or restricted Kalshi, while the CFTC has intervened to assert exclusive federal jurisdiction.
Judge blocks first state law that would have banned prediction markets
3 days ago
- Minnesota became the first US state to ban prediction markets, but a federal court blocked enforcement with a preliminary injunction just before the law took effect.
- The Trump administration and prediction platforms Kalshi and Polymarket sued Minnesota, arguing the state law conflicts with federal authority of the Commodity Futures Trading Commission (CFTC).
- The judge ruled that a total ban likely violates federal law because many event contracts qualify as 'swaps' under the Commodity Exchange Act, giving the CFTC exclusive jurisdiction.
- However, the state may still prohibit certain prediction market wagers, such as bets on the reality show Love Island USA, which do not meet the legal definition of swaps.
Futarchy’s fundamental flaw — the market — the blog post
4 days ago
- Futarchy uses prediction markets to guide decisions, but it fails when markets reflect correlation rather than causation.
- A key flaw emerges when one market is canceled after the other resolves, distorting incentives and prices.
- In an experimental market with two coins (A with 60% heads, B with uncertain bias averaging 59%), coin B's price rose to $0.90 despite a lower true probability, confirming the bias.
- Derivative markets did not fix the issue; prices remained misaligned with causal beliefs.
- The experiment demonstrates that futarchy can select worse options due to strategic betting and uncertainty resolution timing.
- The flaw persists even in realistic setups where information is gradually revealed before market close.
I used to ignore prediction markets. Then I learned people bet on wildfires
8 days ago
- Prediction markets like Polymarket and Kalshi have gained popularity, allowing bets on events from sports to personal matters, but the author initially dismissed them as similar to crypto and meme-coins.
- The author discovered that people bet on the Los Angeles fires via Polymarket, with $1.2 million wagered, prompting disgust among survivors who felt their lives were being exploited.
- Ethicists argue that gambling on fatal disasters devalues human life and may incentivize arson, and the author found a California-specific wildfire betting site, Wyldfyre, which later switched to virtual points.
- The story gained traction, being republished by major outlets and discussed on public radio, leading to new findings like California state employees being banned from betting on prediction markets.
- Regulations for prediction markets vary by state, with Arizona failing to ban Kalshi due to federal intervention, Washington blocking it for violating gambling laws, and most Kalshi markets restricted in Nevada.
- The author concludes that viewing wildfires as entertainment or profit has dangerous consequences, and questions whether platforms or governments will eventually limit such betting.
What we know about the typical Polymarket user
9 days ago
- The typical Polymarket user placed 46 trades over 10 active days, with an average trade value of $6.50.
- About 24% of users placed fewer than 10 trades, while 11% placed 1,000 or more trades in six weeks.
- Most users (58%) gained or lost less than $100, but 7% profited over $1,000 and 9% lost over $1,000.
- Sports, politics, and cryptocurrency account for nearly all trading volume on Polymarket.
- Sports traders were the most active (median 69 trades), followed by crypto traders (59), and politics traders (13).
- The 11% most active users traded on 39 of 42 days, often lost more money, and had a typical loss of $140.
The Hair-Dryer Incident Is Just the Start
10 days ago
- A person manipulated a temperature sensor at a Paris airport using a hair dryer (or similar device) to win about $20,000 on Polymarket, sparking police investigation and highlighting a new type of fraud.
- This 'outsider trading'—manipulating physical events to profit on prediction markets—is considered by some experts a bigger threat than insider trading.
- Prediction markets like Polymarket and Kalshi face challenges with markets that are easy to rig, such as those based on single data points or simple outcomes.
- Examples of potential manipulation include Spotify streaming charts, Rotten Tomatoes scores, and even markets on health events like screwworm cases.
- Platforms could mitigate risks by limiting bet sizes, monitoring for suspicious trading patterns, and aggregating data from multiple sources.
- The platforms' marketing stunts, like staged viral chants, blur the line between reflecting reality and creating it, raising questions about their role as 'truth machines.'
White House teleprompter operator made $100K+ betting on Trump's speeches
15 days ago
- Trump's teleprompter operator Gabriel Perez allegedly made over $100,000 betting on Trump's speeches using inside knowledge.
- He placed bets on prediction market Kalshi for more than a dozen speeches, including the State of the Union and other key addresses.
- Kalshi flagged suspicious trades to the CFTC, and Perez is in settlement talks to return profits and avoid similar trades.
- The White House issued a memo warning staff against using nonpublic information for betting, while Perez continues in his role.
- CFTC investigators found Perez sometimes canceled bets mid-speech if Trump skipped certain words he had bet on.
- Federal prosecutors declined to open a criminal case, and the DOJ has brought insider trading cases on prediction markets involving others.
- Trump has criticized prediction markets but supports their operation, and his company considered launching its own market.
Manifest Man
18 days ago
- Manifest is a conference for the rationalist community, focusing on topics like AI, prediction markets, and self-improvement.
- Sessions included unusual exercises, such as a 'reinforcement learning' workshop where men attempted to become more desirable by receiving feedback, but it often ended in failure.
- Attendees aim to optimize their lives, treating social interactions and even reproduction as problems to be solved through data and markets, like selecting embryos for higher IQ.
- Prediction markets are central to the community, with advocates like Robin Hanson promoting 'futarchy'—using markets to make political and personal decisions.
- The culture combines hedonism (e.g., public cuddling, ketamine use) with a distrust of traditional institutions, seeking to replace expert control with market-driven knowledge.
- Despite its anti-establishment vibe, Manifest has ties to power, including figures from tech and finance, and aspires to become a more influential version of elite gatherings like Davos.
- The movement believes in radical transparency, using markets to reveal personal information (e.g., relationship odds, sexual desires), which is seen as a way to improve outcomes through 'annealing.'
New York can restrict sports gambling on prediction markets, US judge rules
23 days ago
- Kalshi lost a legal challenge to New York's gambling laws, with a federal judge rejecting its request to avoid enforcement.
- The judge ruled that federal registration with the CFTC does not exempt Kalshi from state gambling laws, allowing New York to regulate tangential issues.
- New York officials praised the ruling, emphasizing consumer protection and accountability for gambling platforms, including prediction markets.
- Kalshi is appealing the decision to a higher court, highlighting ongoing legal battles over state vs. federal regulation of prediction markets.
- The CFTC has a more lenient stance on prediction markets than states, and Kalshi and rival Polymarket have ties to Donald Trump Jr.
The AI Superforecasters Are Here
25 days ago
- AI superforecasters have emerged, with startups like FutureSearch and Preseen claiming significant success in prediction markets and stock market outperformance.
- These AI systems typically use large language models like ChatGPT or Claude, enhanced with 'scaffolds' for improved forecasting through extensive research and subagents.
- Current AI superforecasters are competitive with top human superforecasters, with performance metrics showing near parity in forecasting competitions like the Metaculus Cup.
- AI superforecasters offer advantages over humans: they are faster, more diligent, standardized, and can be accessed easily without the logistical challenges of hiring human experts.
- In finance, AI may have a special advantage, as evidenced by Preseen's bot outperforming humans in finance-focused forecasting competitions.
- The trend suggests AI forecasting capabilities are improving rapidly, with predictions that they will surpass human experts within the next year or two.
- AI superforecasters could transform decision-making in finance, business, government, and personal life by providing accessible, high-quality probabilistic forecasts.
- Prediction markets may remain important for epistemic infrastructure, providing canonical forecasts that aggregate AI opinions and mitigate biases across different AI systems.
- Publicly available AI superforecasters include FutureSearch (open for use) and Preseen (in closed beta), with standard AIs also offering some forecasting capability behind the state of the art.
- A potential future role for AI superforecasters is as an 'opinion layer' for AIs, enabling them to provide forecasts on controversial topics while remaining grounded in empirical benchmarks.
How Kalshi Infects the News
25 days ago
- CNN and CNBC have financial deals with Kalshi, a prediction market, and promote it extensively to viewers.
- Disclosure of the financial relationship is inconsistent; CNBC omitted it in at least 22 articles and on-air segments.
- CNN's 'The Odds' segment frequently features Kalshi, touting its accuracy, but it's paid and exclusive, preventing reporting on competitors like Polymarket.
- Kalshi's political markets are flawed, tending to compress toward 50%, overvaluing longshots and undervaluing favorites, misleading viewers.
- Kalshi's political markets represent only 4% of its trading volume, with sports accounting for 80%, but this is not disclosed on air.
Spotify Confirms Streaming Fraud After Kalshi Trader Cries Foul
a month ago
- Caleb Davies, a top Kalshi trader, claims to have earned $1.2 million overall from prediction markets, including $414,000 from Kalshi's culture markets, by analyzing Spotify data.
- Davies suspects bot-fueled manipulation of Spotify-related prediction markets, citing Malcolm Todd's song 'Earrings' surging to number one as a highly improbable event.
- Spotify confirmed investigating and finding evidence of artificial streaming, adjusting charts by removing over 500,000 fake streams, which moved Todd's song from first to fourth.
- Kalshi removed Spotify's logo from its markets and adjusted language at Spotify's request, while investigating the matter, but had already resolved the market based on initial data.
- Polymarket denied involvement, noting it did not list Malcolm Todd as an option, and is reviewing streaming manipulation but has not identified any immediate manipulation.
- The incident highlights new incentives for streaming fraud in prediction markets, with concerns about susceptibility to manipulation raised by regulatory experts.
- Davies has decided to stop trading chart-based markets despite historical gains, citing the manipulation risks.

prediction markets

NY sues prediction market Kalshi alleging it's an illegal gambling operation

Judge blocks first state law that would have banned prediction markets

Futarchy’s fundamental flaw — the market — the blog post

I used to ignore prediction markets. Then I learned people bet on wildfires

What we know about the typical Polymarket user

The Hair-Dryer Incident Is Just the Start

White House teleprompter operator made $100K+ betting on Trump's speeches

Manifest Man

New York can restrict sports gambling on prediction markets, US judge rules

The AI Superforecasters Are Here

How Kalshi Infects the News

Spotify Confirms Streaming Fraud After Kalshi Trader Cries Foul