I'm in the commodity futures business for over 40 years now. The CFTC used to apply what they called an "economic purposes test" to every contract market any and every exchange wished to list. Years ago, the CFTC begrudgingly agreed to "self-certification" whereby contracts very similar to existing contracts could be listed without going through a full approval process provided the exchange did some due diligence. Under those circumstances. exchanges could bypass the CFTC. For example, say an exchange offers a futures contract on Treasury notes with a 10 year maturity. If an exchange wanted to list a contract on Treasury notes with a 5 year maturity that was allowed without going through a full approval process. An exchange could self-certify that contract market. This courtesy, that the CFTC extended to exchanges, has run amuck. Everything is self certified these days. It is ridiculous. Binary options on the results of a game, which is what the prediction markets are offering, could not pass an economic purposes test in a million years.
I confess to underage gambling with my parent's full knowledge. Pretty big stakes given that we were in high school and it was 1965 when the money was worth something. When my great uncle came out for my HS graduation, we got him into the game and relieved him of about $1000. He told my mother it was the most fun he ever had. He lived with his mother all his life. I think this was the first time he ever tasted whiskey. So I am not going to get in a moral panic.
This is fascinating to me. I think he is right on the merits, but he is clearly in the tank for the incredibly profitable FanDual/DraftKings duopoly, which enjoys a nearly 80% market share, according to Google AI. In fact, about two paragraphs in you realize it was written in PR-speak, a particular way corporate-created op-eds are written.
The problem is, FanDual and DraftKings are also malign influences, buying off oh so many conservative media outlets with easy sponsorship money. Kudos to Erick Erickson for being one of the few to reject the east money.
The CFTC power-grab is pathetic and clearly unlawful. But the Hobson's choice between online sports gambling and online prediction market gambling recalls Henry Kissinger's comment during the Iran-Iraq war, rendered in slightly different iterations but essentially this:
States have not "moved cautiously" on sports betting.
Sports betting was cynically embraced as revenue for the state coffers .
It is, however, a vice. And destroys both the bettor as well as sports itself.
Sports betting should be illegal.
I'm in the commodity futures business for over 40 years now. The CFTC used to apply what they called an "economic purposes test" to every contract market any and every exchange wished to list. Years ago, the CFTC begrudgingly agreed to "self-certification" whereby contracts very similar to existing contracts could be listed without going through a full approval process provided the exchange did some due diligence. Under those circumstances. exchanges could bypass the CFTC. For example, say an exchange offers a futures contract on Treasury notes with a 10 year maturity. If an exchange wanted to list a contract on Treasury notes with a 5 year maturity that was allowed without going through a full approval process. An exchange could self-certify that contract market. This courtesy, that the CFTC extended to exchanges, has run amuck. Everything is self certified these days. It is ridiculous. Binary options on the results of a game, which is what the prediction markets are offering, could not pass an economic purposes test in a million years.
Retail, whether it’s in the equity market, bond market, or prediction market is always exit liquidity.
Always.
I confess to underage gambling with my parent's full knowledge. Pretty big stakes given that we were in high school and it was 1965 when the money was worth something. When my great uncle came out for my HS graduation, we got him into the game and relieved him of about $1000. He told my mother it was the most fun he ever had. He lived with his mother all his life. I think this was the first time he ever tasted whiskey. So I am not going to get in a moral panic.
This is fascinating to me. I think he is right on the merits, but he is clearly in the tank for the incredibly profitable FanDual/DraftKings duopoly, which enjoys a nearly 80% market share, according to Google AI. In fact, about two paragraphs in you realize it was written in PR-speak, a particular way corporate-created op-eds are written.
The problem is, FanDual and DraftKings are also malign influences, buying off oh so many conservative media outlets with easy sponsorship money. Kudos to Erick Erickson for being one of the few to reject the east money.
The CFTC power-grab is pathetic and clearly unlawful. But the Hobson's choice between online sports gambling and online prediction market gambling recalls Henry Kissinger's comment during the Iran-Iraq war, rendered in slightly different iterations but essentially this:
"It's a pity they can't both lose."