Federal Judge Allows Betting on US Elections: A Landmark Decision

Background of the Ruling

A federal judge has cleared the way for people to bet on U.S. election results for the first time. A judge in Washington struck down a decision from the Commodity Futures Trading Commission (CFTC) that prohibited gambling companies and users from betting on the outcome of Congressional races. Last Friday, U.S. District Court Judge Jia Cobb ruled in favor of the New York-based company Kalshi.

Regulated Election Markets

A hearing was held Thursday for Cobb to outline the court’s reasoning. As of Thursday afternoon, Kalshi can offer prediction contracts, or yes-or-no bets, on which party will control the House and the Senate after November’s election, at least for now, The Associated Press reported. CFTC immediately appealed the decision Thursday.

Implications of Betting on Elections

“Today marks the first trade on regulated election markets in nearly a century,” Kalshi founder Tarek Mansour posted on X. “This one is for you, the prediction markets community.” It’s not yet known if the company will offer more political betting, including for the presidential race.

Historical Context

No U.S. jurisdiction has authorized betting on elections and several states ban it, but gamblers can use foreign websites as a workaround. In a decision a year ago, the commission told Kalshi it could not offer yes-or-no bets because it constituted an illegal gambling activity that is considered contrary to the public interest.

Concerns About Election Integrity

The CFTC stated that the bets could adversely affect election integrity by “creating monetary incentives to vote for particular candidates,” the AP reported. Betting was already live on Kalshi’s website Thursday afternoon, with individuals weighing in on who they thought would win the Senate and the House.

Betting Market Snapshot

• Betting