New York derivatives trading platform KalshiEx LLC has been cleared to facilitate Americans’ bets on election results following a ruling by the US Court of Appeals.
The court in Washington D.C. upheld a lower-level decision to permit the introduction of legal political gambling in the States after three judges returned a unanimous verdict. On Wednesday (Oct. 2), they ruled the Commodities Futures Trading Commission has “not substantiated that risks to election integrity are likely to materialize if Kalshi is allowed to operate its exchange during the pendency of this appeal.”
The CFTC had alleged the betting was illegal and represented a threat to the integrity of the democratic process. It could still make a further appeal while the existing ruling unfolds “should more concrete evidence of irreparable harm develop.”
In the aftermath of the decision, KalshiEx resumed accepting wagers on the outcome of the 2024 congressional elections and the battle for control of the House and Senate next year.
Further to this, Kalshi’s website has indicated it will take bets on the outcome of the headline, presidential contest between Donald Trump and the incumbent Vice President, Kamala Harris. Another outcome of the appeals court ruling is that other firms could potentially aim to grab a slice of the pie by offering similar derivatives.
Ahead of the crucial vote later this year, 26 states have reportedly passed or are considering bills regulating the use of generative AI in election-related communication as the stakes get higher.
US presidential election markets are legal. Officially. Finally.
Kalshi prevails. pic.twitter.com/jvObcQDczz
— Tarek Mansour (@mansourtarek_) October 2, 2024
US election bets in the “public interest”
During two weeks of submissions, the court panel listened to arguments on the Kalshi offering before making its decision. As the judges pushed representatives on whether the wager markets would impact the integrity of the elections, CFTC General Counsel Rob Schwartz stated the following :
“I don’t want to be too dramatic, but we live in a country where tens of millions of Americans believe the last presidential election was stolen.”
Meanwhile, Kalshi co-founder Tarek Mansour welcomed the ruling, heralding the highly sought official status of the election markets.
For some time he has pointed to the public interest of the contracts as they can provide a source of accurate data for election forecasting and enable Americans to hedge their bets on various results.
Image credit: Via Ideogram
