Which politicians will win in the upcoming November 2022 mid-term elections in America? Every news outlet has poll results and opinions, and the candidates in the political races are out in force lobbying the public for their votes.
We know one thing for sure: Candidate A will beat Candidate B. And people want to bet on that.
Even more, people want to start betting on the 2024 US presidential election. Will the current president run again? Does the former president want his old job back? Those two baseline questions alone have already triggered heated debates at news programs and in homes across America.
Want to bet on it?
They do. They really do. And while one company just lost its fight to accept these kinds of futures bets, Kalshi believes it has figured out a way to do it.
Based on Sports Betting Growth
The United States sports betting market is the fastest growing market of its kind in the world.
Its current growth began in 2018 when the US Supreme Court ruled that the core of the 1992 Professional and Amateur Sports Protection Act (PASPA) of 1992 was unconstitutional. That now-famous case gave the win to New Jersey but also to Americans across the country who wanted to bet on sports. The SCOTUS ruling gave every state the right to legalize sports betting and determine the methods by which the people it each state could do it.
Within two years of that ruling, approximately 30 states did legalize sports betting in some form. And more states are in the process of debating legislation allow them to join that club.
https://twitter.com/robinsportsnews/status/1566453681221935104?s=20&t=59nDfHeVb41QhQZ8YQaAUg
The US market remains different on some levels from global sports betting options.
However, America has yet to embrace political betting. Some sites do offer betting on political races in the United States and in other countries. Bettors can place wagers on these items, for example:
-Which political party will control the House of Representatives after the mid-term election?-Will President Joe Biden run for reelection in 2024?-If not, who are the top candidates to run in his place?-Who will lead the Republican Party in its 2024 presidential challenge?
There are even bets on the person who will win the Brazilian presidential election.
US Regulator Unimpressed
The United States Commodity Futures Trading Commission (CFTC) is not interested in political betting.
PredictIt is a company that launched in November 2014 in New Zealand but operates now out of an office in Washington DC. It advertises as a nonprofit project with an educational core. It sells shares into a market that helps predicts government elections around the world, including in the United States, both federally, statewide, and locally. People can bet on everything from the candidates to margins of victory.
The educational component is PredictIt’s sharing of data with numerous researchers at universities.
In February 2023, PredictIt will stop operating in the US market, per the CFTC.
On August 4, 2022, the regulator said the company did not comply with market rules, which it detailed in regular letters to PredictIt. The company had to remain small in scale, capping investments in any contract to $850. There were also limits on advertising.
PredictIt disagreed with the decision. And it filed a lawsuit on September 9 in the US federal district court system to require justification for the ordered shutdown.
https://twitter.com/PredictIt/status/1569355354320019459?s=20&t=CegXOZqp2UTIQUG6N1tLjA
Kalshi and Aristotle Make Plans
Another similar company called Kalshi began operators earlier in 2022, per the CFTC’s approval. Kalshi offers betting markets for everything from natural disaster occurrences to mortgage rate. With that success thus far, it applied to the CFTC to offer political betting markets.
Kalshi expects to receive an answer by October 28.
https://twitter.com/mansourtarek_/status/1564315602184978435?s=20&t=CegXOZqp2UTIQUG6N1tLjA
PredictIt contract service provider in the betting market, Aristotle, filed a proposal with the CFTC to start its own betting exchange. That company filed its proposal in October 2021 but has yet to receive guidance from the regulator.
In addition to the proposal, Kalshi has requested that its customers file requests with the CFTC to it to operate and remain active through the 2022 elections, at the very least. Public comments may show enough support for the market, which Kalshi clarifies is not akin to sports betting.
Kalshi CEO Tarek Mansour told Politico, “Everyday Americans are always exposed to election risks. We are trying to bring these tools to the masses.”
