Kalshi is a high-tech prediction market that allows people to "forecast the future" (their term). It is about contracts and information, the company says, making its offerings more like a soybean futures contract than a round of blackjack or a pull on the one-armed bandit.

Still, prediction markets look a lot like betting if you squint, which is why states like New York have tried to regulate them under gambling laws. To head this off, Kalshi has sought federal protection under the Commodity Futures Trading Commission (CFTC). Yes, this means regulation for Kalshi, but it also means the CFTC will sue states like Kentucky, Minnesota, Illinois, and Rhode Island, trying to pre-empt their laws in favor of a single national standard that the CFTC controls.

While this battle plays out, government insiders continue to generate insider trading stories after using their work knowledge to place bets "forecast the future" and make huge sums of money. The classic example, of course, was Gannon Ken Van Dyke, a US soldier who participated in planning the capture of Venezuela's Nicolas Maduro and then made $410,000 from that knowledge on the prediction site Polymarket. Van Dyke was arrested in April.

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Kalshi lost an attempt to override New York's state gambling laws yesterday, with a federal judge rejecting the prediction market operator's request to prevent enforcement of the rules.

Kalshi is appealing the decision to a higher court. This is one of numerous cases in which judges must decide whether state laws are preempted by federal regulation of prediction markets.

New York Governor Kathy Hochul and Attorney General Letitia James issued a joint statement on the ruling today. “New York’s gambling laws are designed to protect consumers," they said. "Kalshi tried to ignore them. Yesterday, they lost in court. We will continue to hold all gambling platforms accountable to the law—and that includes prediction markets.”

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