Legal Path Opens for US Presidential Election Betting: "Product Launch Next Week"

Court Rules in Favor of Betting Platform Company
Launches Products Predicting Winners of Trump vs Harris and More

'Election betting,' which has been taboo in the United States due to concerns over fairness violations, has entered the path toward legalization.

The Wall Street Journal (WSJ) reported on the 12th (local time) that "until just a few days ago, election betting was banned by the federal government, but it is now set to open to millions of Americans," adding, "The entry of major brokers has also given momentum to the election betting market rising into the mainstream."

In the United States, the market for 'event contracts'?which involves predicting and betting on future events ranging from typhoon landfall dates to the Federal Reserve's interest rate cuts and the release timing of Taylor Swift's next album?has been active. However, betting on election outcomes was not allowed due to concerns that values such as fairness and trustworthiness of elections could be undermined.

However, recent unexpected rulings by a federal court in Washington D.C. have accelerated the legalization of election betting. In a legal battle between the U.S. betting platform 'Kalshi,' which sought to launch prediction products for the majority party in the upcoming November U.S. Congress elections, and the U.S. Commodity Futures Trading Commission (CFTC), which sought to regulate it, the court ruled in favor of Kalshi. The court also ultimately rejected the CFTC's request for a stay of the ruling, bringing election betting within the bounds of the law.

Judge Gia M. Cobb, who handled the case, stated, "The products Kalshi seeks to launch are unrelated to illegal activities or gambling," adding, "Rather, they are related to elections, and elections are neither illegal nor gambling." She further emphasized, "The court is not here to make value judgments about whether the activation of the betting market is a good thing or what matters Congress should address. The court's sole duty is to determine what Congress has done, and Congress has never authorized the CFTC to review what serves the public interest."

Kalshi immediately celebrated. Luana Lopez Lara, co-founder of Kalshi, posted on her X (formerly Twitter), "Election betting is now legal in the United States," welcoming the development by saying, "It is infinitely honorable and like a dream to be able to reopen this betting market in the U.S. after 100 years." On Kalshi's website, betting is already underway on which party will hold the majority in the U.S. House and Senate in the November elections. As of 3:30 p.m. Eastern Time, about 50,000 contracts had been traded.

Major brokers are also rushing into the election betting market. Interactive Brokers, the largest U.S. electronic trading brokerage with over 3 million customer accounts, announced plans to launch a betting product on the 16th that will allow bets on whether Vice President Kamala Harris or former President Donald Trump will be the next occupant of the White House.

Lorian Cristea, an event contract expert at Barnes & Thornburg, said, "This court decision is a significant moment for the industry," evaluating that "people who had been trading on unregistered or illegal gambling sites overseas can now trade in a safe market that is monitored and regulated under clear rules."

However, critical voices are not few. Cantrell Dumas, head of derivatives policy at the nonprofit Better Markets, criticized, "Allowing Kalshi's political derivative contracts is a dangerous move that opens the floodgates to unprecedented gambling on U.S. elections and erodes public trust in the market and democracy." The CFTC has appealed without commenting.

Meanwhile, on the decentralized prediction market platform 'Polymarket,' cryptocurrency holders are actively betting on who will be the next occupant of the White House in November. As of 10:35 a.m. (Korean time) on the day, the amount wagered on the U.S. presidential election results neared $897 million (about 1 trillion won). On the platform, the chances of former President Trump and Vice President Harris winning are tied at 50%, showing a tight race.