America, get ready to place your bets. Perhaps.
In early September, financial exchange startup Kalshi won its battle to provide the chance for folks to place bets on which party will control Congress next year.
District Judge Jia Cobb in Washington ruled in favor of Kalshi and against the Commodity Futures Trading Commission, which had prohibited Kalshi from offering such bets. The commission, which is a federal agency, contends that regulated election-betting markets are illegal under both federal and state law.
The commission appealed Cobb’s ruling, expressing concerns that betting could lead to elections being manipulated for financial gain.
But Kalshi quickly rolled out what was the first fully regulated market for election betting. Bets poured in on whether Democrats or Republicans would control Congress after November’s elections.
According to The Associated Press:
“At one point, a bet on the Republicans to win control of the Senate was priced at 76 cents; a $100 bet would pay $129. A bet on the Democrats to win control of the House was priced at 63 cents, with a $100 bet paying out $154.”
In mid-September, the Court of Appeals for the District of Columbia Circuit halted all betting until it can weigh and rule on the matter. The status of the bets already accepted by Kalshi remains unclear.
Previously, people have been able to bet on elections through entities not based in the U.S., such as Polymarket and PredictIt. But with Cobb’s ruling — and Kalshi’s response to it — it appears possible that such betting is about to enter the U.S. mainstream.
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