US election betting strikes it big as prediction markets surge
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Post-debate bets… are now table stakes. A federal judge sided with a New York prediction market that had been fighting regulators over election-related bets in the US. Kalshi, which is regulated by the Commodity Futures Trading Commission, got the green light to list bets on congressional elections. Prediction markets like Kalshi let users wager on real-world events, from the size of Fed rate cuts to whether Justin Bieber will release a new song this year.
Jackpot: Kalshi celebrated its win over the CFTC. “Election markets are now legal in the US for the first time in 100 years,” it said, adding that election bets were coming soon.
The house still wants to win: The CFTC sought, and the court granted, a pause on the ruling until a hearing set for tomorrow.
A crowded table… The prediction markets industry is booming, with PredictIt and crypto-based Polymarket overseeing hundreds of millions of dollars in bets. Polymarket, which bars folks in the US from using its service, saw half a billion dollars in trading last month alone. As of yesterday, Polymarket had $850M+ wagered on who’ll win the US presidential election. Before last night’s debate, people could buy events contracts on everything from whether Donald Trump would say “bitcoin” to whether VP Kamala Harris and Trump would shake hands (bettors gave a 27% chance).
It’s tricky pulling chips from the pot… especially a big one. Polymarket saw $1.1B in bets since June, and 88% of those were on US elections. Kalshi’s court win could set a legal precedent for election betting in America. Still, regulators and lawmakers have argued that election betting could hurt the integrity of the democratic process.