Investing?
Gambling?
Risk Management?

What are they, and how should we look at them with regard to regulation or investing potential, compared to Wall Street or Caesar's Palace?

Mainly, an insurance policy.

Secondarily, treat it like legal (for now) insider trading. You might have an edge where you can take people's money, but someone might have a bigger edge that you don't realize.

I have generally thought of them as hedging vehicles, as well.

My brother in law sent me a link a while ago, as he knows I like investing in potential takeover candidate companies:

https://polymarket.com/event/which-companies-will-be-acquired-before-2027

I like this particular one, for several reasons. One, it can help surface companies (the ones that are publicly traded, anyway) for my further due diligence as takeover candidates. It could also be used as hedges against the probability that they're acquired, if that's your primary investable premise for these companies.

So, I see potential, but I do think Prop Joe's insider trading angle / loophole should be closed to bring parity with either gambling or stock market regulations.

The people who blatantly insider trade in the real stock market barely get a slap on the wrist.

What's going to happen to the guy who took some chumps money on Kalshi?

Isn't Polymarket banned in the states?

HawthornAggie said:

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Isn't Polymarket banned in the states?

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yes

it is Kalshi that is legal

Got it, thanks!

Why is polymarket banned but Kalshi is not?

YouBet said:

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Why is polymarket banned but Kalshi is not?

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Apparently, Kalshi is a regulated US company, while Polymarket is set up under international laws.

Also, they are each supposedly eyeing going public, at around a $20 billion valuation, each. This compares to MGM at $9 billion market cap, and Caesar's at $5 billion. I would think the legality question would have to be solved for either to be worth anything close to these speculative valuations.

I bleed maroon said:

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I have generally thought of them as hedging vehicles, as well.

My brother in law sent me a link a while ago, as he knows I like investing in potential takeover candidate companies:

https://polymarket.com/event/which-companies-will-be-acquired-before-2027

I like this particular one, for several reasons. One, it can help surface companies (the ones that are publicly traded, anyway) for my further due diligence as takeover candidates. It could also be used as hedges against the probability that they're acquired, if that's your primary investable premise for these companies.

So, I see potential, but I do think Prop Joe's insider trading angle / loophole should be closed to bring parity with either gambling or stock market regulations.

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Everything listed on the link are companies prominently featured in the news with takeover speculation surrounding them already. Polymarket isn't surfacing companies as takeover candidates. Markets are being made after they've been blasted out in the news already and presumably takeover odds priced into their underlying price.

I wouldn't touch these sites. Like 25% of the market is more likely than not just wash trading schemes and it's rife for significant market manipulation at the moment.

Market manipulation or not, there's plenty of great insurance hedges available often times at better rates/odds than you can find elsewhere.

Proposition Joe said:

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Market manipulation or not, there's plenty of great insurance hedges available often times at better rates/odds than you can find elsewhere.

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I'm dubious of this both in my own looks at Kalshi markets as well as just the nature of them. Owning binary options is usually a losing bet in the long run.

Does the IRS consider it gambling or investing? There is a pretty big difference when it comes to taxes and offsettkng losses against gains.