[0] https://www.businessinsider.com/polymarket-paris-weather-bet...
If you're long Florida grapefruit futures, hedging against an early freeze is an economic trade on the future value of a real thing.
Almost anything can be gambling if you make it gambling. Effectively all the assets in the securities world that can be bought and sold as derivatives exist to facilitate and existing industry by offsetting risk.
Cordially, this is kind of like saying in a discussion about mathematics, "numbers are backed by something real." And hand waving over a whole suite of objects that have no real backing at all.
Options and futures contracts have existed in some form for pretty much the entire history of commerce. The heart of the problem is that people need to be able to take risk for some endeavours, and want to have financial instruments to mitigate that risk.
In blunt terms: if it's ok for the farmer and the baker to agree on a forward futures contract for the price of wheat so they can run their business, then it should be ok for both parties to sell their contracts on the secondary market to get liquidity (e.g. a farmer is fully leveraged in seeds, has the promise to sell wheat for price x at time y, but needs cash now to fix whatever). The bank should then be able to monetize it's exposure and sell calls on the open market. At this point we're not trading on anything "real" anymore than betting whether the harvest season will be good (or bad)
That secondary market is as real as anything on kalshi. So how would you propose to craft laws to mark one as gambling and the other as investing?
Why wouldn't they be regulated any differently?
Furthermore the institutions that allow you to trade mostly aren't taking positions on the stock price and in theory there are jail-time consequences if they cheat. In practice that isn't always the case but at least there is some limit to what they can do to screw over their customers.
These contract markets have absolutely none of that. If they decide to take up positions to stuff their own pockets you probably wouldn't even know it and it wouldn't be illegal either. They can make up contracts for anything and everything without limit. If they aren't front-running their own customers then they're idiots because that's free money. And they can just lie about the odds as they like so if bets aren't going the way they want just tip the scales.
Oh and they have absolute control over whether any event counts as success or not and how to handle edge cases. There's no one you can appeal to.
Maybe they operate above-board in all aspects. Maybe they don't. No one really knows.