Comment Would this inefficient workaround be legal? (Score 1) 46
Set up two companies in a state or country where there are no legal issues. One says "invest in us, if [event] happens by [date], we will pay off more than you invest because company #2 will turn all their assets over to us" and the other says "invest in us, if [event] does not happen by [date], we will pay off more than you invest because company #1 will turn all of their assets over to us." Set up both companies to liquidate and return assets to stakeholders on [date].
Then list the companies on an exchange accessible to US residents or if that's not possible, create a pair of holding companies or closed-end mutual funds that own 100% of company #1 and company #2 above and list them on an exchange accessible to US residents.
If this would be a legal way for New York residents to invest in the outcomes of events, it sounds like Kalshi is just doing the above but without all of the middlemen and inefficiencies that come with middlemen.
If this is not legal, I would ask "why not?"