There is considerable interest in wagering on U.S. election races this year, but, depending on the day and location, the legal options for doing so may vary.
In short: somehow, election betting is exploding in popularity in certain places and yet stopping and starting in others.
Meanwhile, U.S. election odds continue to show Democratic Vice President Kamala Harris as the favorite over Republican Donald Trump to win the presidency in November.
PowerPlay, a regulated sports betting site in Ontario, had Harris as a -125 favorite and Trump an even-money underdog as of Friday afternoon.
“Trump hasn't been the underdog this entire time, whether it was Biden or Harris [running]," said Larry Fisher, head of content for PowerPlay, in an interview this week. “And so we're seeing people throwing some money at Trump just in the last couple of days.”
waiting for election markets to go live pic.twitter.com/o4qMzyge19
— Kalshi (@Kalshi) September 12, 2024
However, the latest twist for legal election betting stateside came Friday, when the U.S. Court of Appeals for the District of Columbia Circuit stayed a lower-court decision that essentially paved the way for prediction market Kalshi to offer U.S. election-related contracts.
On Thursday, following that lower-court ruling, Kalshi had thrown up two markets asking which parties would win control of the House and Senate. But, as of Friday afternoon, Kalshi's election webpage said that trading was paused "pending court process."
The stay that preceded the shuttering of Kalshi's markets came at the request of the Commodity Futures Trading Commission, which is trying to stop Kalshi from offering the contracts. The regulator argues the contracts are unlawful and gambling-related activity, and therefore not in the public interest, but those reasons were shot down by the D.C. District Court.
Even so, election trading looks to be off the menu at Kalshi pending further action by the appeals court. The company had until 6:00 p.m. on Friday to file a response to an emergency motion by the CFTC for a stay.
“The purpose of this administrative stay is to give the court sufficient opportunity to consider the emergency motion for stay pending appeal and should not be construed in any way as a ruling on the merits of that motion,” the appeals court added.
Hold that thought
Thursday's ruling appears to have poured cold water on the plans of trading platform Interactive Brokers to launch a presidential election betting market of its own.
A spokesperson told the Wall Street Journal that the company "can be more definitive" about its plans once it wraps its head around the latest legalities.
The launch of election markets on Kalshi and Interactive Brokers could help supercharge legal wagering on politics in the U.S., albeit not through online sportsbooks such as DraftKings or FanDuel.
In the meantime, that legal sort of de facto election betting is confined to prediction markets PredictIt and Iowa Electronic Markets in a limited fashion.
Election wagering is already legal in a format much more familiar to sports bettors in the United Kingdom and Canada, where PowerPlay operates. The markets outside the U.S. continue to see strong interest from political punters, so much so that record amounts of wagering is in play this cycle.
“A frenetic few days on the Exchange has seen Harris take command of the race for the White House and raised the possibility this could be another record-breaking election on Betfair,” the U.K.-based wagering site declared on Thursday.
The bets are yet to come
It’s possible many would-be political bettors haven’t even sat down to place a wager.
The U.S. election is Nov. 5, which offers plenty of opportunity to do so between now and then. It also leaves time for Kalshi and Interactive Brokers to enter or re-enter the fray.
“That last month leading up to Nov. 5, based on previous elections, it sounds like that's when the markets kind of settle a bit, and then that's when all the real money comes in,” PowerPlay’s Fisher said.
