A federal judge has allowed Kalshi, a New York startup, to proceed with offering the first legal bets on the outcome of the upcoming congressional elections. This follows a ruling on Thursday by U.S. District Court Judge Jia Cobb in Washington, permitting the company to offer predictive contracts across the country, despite opposition from federal regulators.
Kalshi’s contracts allow users to place yes-or-no wagers on whether Republicans or Democrats will control the Senate and House in November. As of Thursday afternoon, prices fluctuated, with bets on Republicans winning the Senate costing 76 cents per contract and Democrats controlling the House priced at 63 cents.
Tarek Mansour, co-founder of Kalshi, celebrated the ruling as a milestone for the platform. “The Kalshi community just made history,” Mansour said. “Now is finally the time to allow these markets to show the world just how powerful they are at providing signal amidst the noise, and giving us more truth about what the future holds.”
However, the Commodity Futures Trading Commission (CFTC), which previously blocked Kalshi’s attempts to launch election betting markets, expressed concern over the decision. CFTC attorney Raagnee Beri warned that allowing such betting could incentivize market participants to manipulate election outcomes, potentially eroding public trust.
“These contracts would give market participants a $100 million incentive to influence the market on the election,” Beri argued, emphasizing the potential risk to public confidence.
Despite these concerns, Kalshi’s attorney, Yaakov Roth, defended the company’s efforts to operate within the bounds of U.S. regulations. He contrasted Kalshi’s approach with foreign operators that have offered election betting to Americans without legal oversight.
Roth emphasized Kalshi’s investment in securing regulatory approval, arguing it would be unjust to block the company’s activities after so much effort and capital had been committed. “They spent millions of dollars. It would be perverse if all that investment went up in smoke,” he said during Thursday’s hearing.
While Kalshi’s election betting markets are now live, the CFTC is preparing an emergency appeal to challenge the ruling. The commission has indicated that it will continue to fight to prevent the proliferation of election betting in the U.S., citing the potential for malicious interference in the democratic process.
In the meantime, Kalshi has offered other political prediction contracts, such as whether a government shutdown will occur or if a new Supreme Court justice will be confirmed this year. The company has not announced whether it will expand its election markets beyond the upcoming congressional races.
This is not the first time election betting has been permitted in the U.S. West Virginia briefly allowed election betting in April 2020, but the state reversed its decision after just one hour, citing a lack of sufficient research.
Original article: https://www.yogonet.com/international/noticias/2024/09/13/78599-ny-startup-kalshi-launches-first-legal-election-betting-markets-in-us-after-judges-ruling
