A trader won $400,000 on an online platform that allows users to bet on the outcome of political elections, sporting events and other real-world developments. Such outlets have expanded rapidly over the past year, even though consumer protections and enforcement against insider trading remains looser than in traditional financial markets, according to legal experts and former regulators. States, which have historically regulated gambling, may pose the main obstacle to faster growth now. At least nine, including Massachusetts, Nevada and New Jersey, have taken action to try to block these markets, reasoning that they should be subject to state oversight. The issue is likely to be ultimately decided by the Supreme Court, according to Andrew Kim, a partner at the law firm Goodwin. “Financial speculation has generally been regulated by the federal government, while gambling has been regulated by the states,” he said. “The question is, what is this? Is it a financial asset or is it gambling?”
Read the Washington Post article for more.