alt Hacker News> What they are doing is quite obviously legal right now. Federal law trumps state law…
No. There's no "states must permit gambling" Federal law for state bans to conflict with currently; states are free to ban it.
https://en.wikipedia.org/wiki/Gambling_in_the_United_States
"While gambling is legal under U.S. federal law, there are significant restrictions pertaining to interstate and online gambling, as each state is free to regulate or prohibit the practice within its borders."
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If it were that simple then these markets would have been shut down already.
Matt Levine has gone into great detail about the legal chicanery that brought us here, but it summarizes as "it's not gambling, it's futures trading".
This seems like nonsense to you and me (and Matt Levine), but our opinions are irrelevant here. The courts' opinions are, and so far they've been coming down on the side of the prediction markets. Mostly.
So by definition - as weird as it is - it's legal. So far.
While I know of a few cases where federal law can force a state to have looser restrictions (for example, the second amendment), it's pretty uncommon. Usually if a state wants to ban something, it can ban it and federal law can't stop such a ban without a pretty strong constitutional justification.