Derivatives exchange Kalshi has listed event contracts for betting on United States election outcomes after prevailing in a landmark court battle in September, Kalshi’s founder, Tarek Mansour, said in an Oct. 7 post on the X platform.
“You can now legally trade on the US presidential election, margin of victory, state winners, and more,” Mansour said in the X post.
This marks the first time an election prediction market has been permitted to operate in the US. It paves the way for others to enter the fray, including Web3 platforms such as Polymarket.
Source: Kalshi
Related: Prediction markets like Polymarket a ‘public good,’ more accurate than polls
Kalshi has self-certified more than a dozen election betting contracts, according to the Commodity Futures Trading Commission (CFTC).
Kalshi’s contracts are binary options with payouts tied to specific political event outcomes. They include predictions such as “Will candidate be the presidential nominee of political party in election year?” and “Will political party win Senate seat for the term starting year?,” according to the CFTC.
In September, Kalshi prevailed against the CFTC in a lawsuit challenging the regulator’s decision to bar Kalshi from listing political event contracts.
The CFTC appealed the ruling and sought a temporary injunction to stop Kalshi from listing any political event contracts, but on Oct. 2, the court ruled in favor of Kalshi.
Kalshi event contracts. Source: CFTC
Kalshi’s popularity still lags far behind that of Polymarket, which has emerged as the dominant platform for election betting.
Upward of $1 billion rides on the outcome of the November US presidential election on Polymarket as of Oct. 2, according to its website.
So far, Kalshi’s equivalent contract has drawn approximately $775,000 in volume.
The CFTC said election prediction markets such as Kalshi threaten the integrity of elections, but industry analysts say they often capture public sentiment more accurately than polls.
“[E]vent contract markets are a valuable public good for which there is no evidence of significant manipulation or widespread use for any nefarious purposes that the Commission alleges,” Harry Crane, a statistics professor at Rutgers University, said in an August comment letter filed with the CFTC.
Magazine: Anti-aging tycoon Bryan Johnson almost devoted his life to crypto