I don't understand why it is a crime under current US law.

Prediction markets can only do sports gambling (the vast majority of their volume) because they self-certify under the CFTC. The CFTC doesn't have the same standards of "insider trading" as the stock market, because insider trading is the entire point of business at the CFTC!

If you're trading, like, oil futures or wheat futures or whatever, you are likely doing so specifically because you have inside information about your business needs or production that you want to hedge.

I understand why people are mad about gambling versus someone who has insider information, but under current US law I'm not sure that there is a case to be made.

> If you're trading, like, oil futures or wheat futures or whatever, you are likely doing so specifically because you have inside information about your business needs

Insider trading, in the U.S., is not legally about fairness but about theft. A firm hedging its own positions is using its information for its own purposes. A federal employee trading on what they heard is abusing the trust placed in them by the American people.

> Prediction markets can only do sports gambling (the vast majority of their volume) because they self-certify under the CFTC

Sports betting is still illegal in 11 states. They can only do what they’re doing because of legislation and enforcement lag.

> The CFTC doesn't have the same standards of "insider trading" as the stock market, because insider trading is the entire point of business at the CFTC!

True to some extent, but it’s still illegal to use non-public information gained from your firm to trade on personal accounts.