Prediction markets do not face a gambling problem, says the encrypted currency lawyer

Singapore and Thailand She recently moved to Polymark’s ban from her judicial statesOn the pretext that the site is just another platform for gambling.

on the surface, This argument appears logical. The insertion of Polymarket for sports prediction markets make it look like a competitor to licensed sports betting around the world.

After all, even the most critical of the prediction market admit that there is some kind of value in the investment mechanism to hedge against events such as elections, but the result of the sports match has no material impact on elections or war.

But below the surface, the argument that the prediction market is just a Web3 version of the gambling is insufficient, says New York cryptocurrency lawyer, Aaron Bergan.

“If you are a licensed gambling producer, you take one aspect of betting. Berugan said:” You are betting mainly against your users. “You reserve the bets … and provide certain possibilities for users. Whether you make money or not depend on the possibilities you specify.

On the other hand, prediction markets such as polymarket and kalshi are working as neutral mediators that match the deals without taking any aspect, which earns money through transactions.

“You do not bias alongside the bet as a market in this case, which mainly changes the incentives concerned and makes the product different in a comprehensive way,” said Berogan. In the same way as the casinos take out the cards counting as it eliminates the sports advantage of the home.

“The prediction markets do not do the gambling because they are not organized,” said Berogan. “They are tools for understanding, hedging and creating general benefits. This makes them mainly different.”

Obtaining an online gambling license in the United States was a hard effort, and one may wonder why new players are not pursued in this field, such as Draft Kings or existing companies such as MGM, which followed by opening online sports, predictance markets. At the state level where gambling is regulated.

Berugan says the main legal discrimination lies in the organizational framework. In the United States, the predictive markets are subject to specific contract markets (DCMS) to federal regulation through the commodity exchange law, which anticipates gambling laws in the state.

“Federal law in the United States anticipates the law of the state.” “The commodity stock exchange law includes a specific ruling that prevents the Islamic State for derivatives registered federally. If you are a federal registrar, the states will not be able to regulate you.”

Calish seems to be confident in this argument, as the prediction market platform, which actively sought to register with the Committee for Goods Trading – has fought its initial attempts. Preventing prediction markets related to elections – It was recently launched Super Ball Markets.

But this may not succeed with its competitors.

“Bulimark, for example, is not registered in the United States, so it can be said that the states can go to its founder and say to him:” I have facilitated sports betting, and it is a felony in this state, “and brings a legal lawsuit. Berogan said:” But the stock exchanges The recorder does not face this problem because of its federal situation. “

While Polymarket and KALSHI are the most famous in this field, there are many other new expatriates who are following their footsteps.

One of them is the exchange of crypto.com currencies, Recently launched Crypto.com Sports after submitting a self -certificate as a DCM at CFTC.

Berugan explained that the basic matter is that if the CFTC Trading Authority (CFTC) does not take action within 24 hours after submitting self -approval papers, the applicant can deal with that as a green light.

“If this is able to spread, and if the CFTC Trading Authority does not take any action, which they have not yet done, they will end up taking lunch of these sports books. This is an industry worth 21 billion dollars, and this new product will be Better.