U.S. sportsbooks dangle a variety of detailed and cryptic possible wagers in front of customers six years after the Supreme Court’s 2018 decision that paved the way for widespread legalization of cellular sports betting. Their effect reaches full into U. S. world.
However, they are n’t betting on state elections, which is another industry. Prior to the 2024 election, no U.S. state already permits the practice.
However, companies such as Sequoia-backed Kalshi, PredictIt and economic tech giant Robinhood provide fix entries into the business through social event futures agreement trading. The Commodity Futures Trading Commission ( CFTC ), a federal agency, is currently in charge of these trades, but it is claimed that they are a form of gambling. Although it may take a while before the D.C. Circuit Court of Appeals hears oral claims, Kalshi and the CFTC are currently engaged in legal battles.

By applying futures trading to politicians, organizations are lapping up profits, while BetMGM, Caesars, DraftKings, FanDuel and another U. S. betting officials stay out of the profitable line of business.
As of Friday, Kalshi has placed bet totaling more than$ 142 million on the success of the presidential election and$ 18 million on the success of the popular vote. Before Tuesday’s voting, those figures are anticipated to increase even more.
On futures trading systems, users can buy arrangements for Donald Trump or Kamala Harris winning the 2024 presidential vote at a price set by how much people income has been placed on either side. A Trump victory contract for Kalshi costs about$ 0.56, which gives him an implied 56 % chance of defeating Harris, despite the fact that each contract is priced at a fraction of$ 1.
Customers who have Trump agreements can possibly sell each commitment as the price changes, or wait until the outcome is decided, receiving a full$ 1 per deal if Trump wins. If Trump loses, those agreement users get little. A Trump victory would net about$ 0.44 per contract in winnings, or$ 0.44 per contract, the difference between a user’s first payment and$ 1.
Through transaction costs, the businesses that offer these deals profit.
Until lately, the most-sought prospects were usually tied to global economic measures such as petrol prices, government information and currency exchange levels, used as a means of hedging against other purchases.
Since Oct. 4, Kalshi has hosted more than 185.5 million futures trades involving political outcomes, according to information the company has shared with Sportico. It has also placed in the top five of free U.S. downloads, advertising itself as a “bet the 2024 election,” while also claiming to be a sports betting company in court and a statement to Sportico.
” Kalshi is not subject to state laws on this topic, because we are instead federally regulated and do not offer gambling products”, a spokesperson wrote in an email.
The well-known futures trading service Polymarket, which has raised more than$ 70 million in two venture funding rounds, has a different philosophy. After drawing scorn from the CFTC, it decided to work exclusively offshore and stop offering its products to U.S. consumers in 2022.

Because of its global popularity, Americans still keep a watchful eye on Polymarket data, and some attempt to use software to bypass its location restrictions to place wagers.
Three prominent U.S. sportsbook employees, who requested anonymity to discuss private company matters, said they were unaware of any imminent plans for their firms to enter the space despite Kalshi’s rapid rise.
Instead, sportsbook operators only seem interested in offering political bets in the United States in traditional form or not at all, arguing that futures trading is incompatible with their business models. In part, that is because they are already grappling with regulators elsewhere.
Sportsbooks may be concerned about the reputational damage that could result from their participation in the contentious political futures trading mix, according to Keith Whyte, executive director of the National Council on Problem Gambling.
In a video interview, Whyte, who collaborates closely with sportsbooks to establish responsible gaming standards, said,” The online gambling industry is currently dealing with a lot of potential backlash [as it is].
The parent companies of FanDuel, DraftKings and BetMGM do offer straightforward political betting on U. S. elections in countries such as England and Canada. This year, Flutter Entertainment, the owner of FanDuel, praised its U.K. Betfair Exchange as” a more powerful source of truth” than polling.
In 2020, the West Virginia Lottery announced it would allow election bets, which provided a brief glimpse of U.S. political betting legalization. FanDuel posted presidential odds before state officials reversed course and shut down the market about an hour later.
Political betting has since been piqued the general interest in the U.S., and it has also been impacted by the stateside ban, according to experts, due to the rise of sports gambling.
Publications that keep sports bettors informed now publish frequently columns about the most recent election results to pique readers ‘ interest.
” Betting is a lens that they apply to more and more things throughout their life, right”? Andrew Lynch, who has worked on political campaigns before joining the media industry and has led online betting content production at Fox Sports, the Action Network, and Better Collective, said. You become more at ease with gambling. … It just becomes a different way of looking at things. Your daily routine becomes very normal.
Lynch, a self-described political betting nut, added that sports wagers have made placing money on non-sports outcomes seem less absurd to the average person. Sports odds are plastered everywhere, from live TV broadcasts of championship games to social media. They are easily transposed to other facets of life, including elections.
In addition to the marketing tactics that sportsbooks frequently employ to entice wagers on athletic events, Kalshi is putting up advertisements on digital media platforms like” Bet$ 100 on Trump, Get$ 175″ in the run-up to the 2024 election.
” People are more comfortable and conversant in betting and what the odds mean”, Lynch said. They now comprehend more clearly. They suddenly say,” Oh, Harris is + 130, I know what that means,” in a way they did n’t know four years ago.
While states oversee gambling, the federal CFTC regulates trading on event futures. The Commodity Exchange Act, which was last updated by Congress in 2010, broadly defines its rule-enforcement authority.
The CFTC has a right to reject futures for a variety of reasons, including those that involve “gaming.” Whether “gaming” includes “gambling” —and whether Kalshi’s political futures trades fall under either of those terms—is a semantics tussle that is a critical part of ongoing litigation between the U. S. based company and the CFTC.
The CFTC shut down Kalshi’s politics-related trades in 2023, citing its similarity to gaming and potential threat to public interests. Kalshi sued the CFTC to reclaim its right to offer political trading, arguing that it is not both gambling and gaming, and U.S. District Court Judge Jia M. Cobb granted the company’s favor in September.
The way Congress worded the Commodity Exchange Act has hurt the CFTC in court so far, said Mark Wetjen, a former commissioner and acting chairman of the agency who is now a partner at Dentons law firm.
Wetjen said, highlighting a crucial element of the District Court judge’s opinion summary when ruling in Kalshi’s favor,” Congress ] understood what gambling was, but they did n’t actually, specifically say “gambling,” instead of” they just said ,’gambling,” in the statute.
The D. C. Circuit Court of Appeals denied the CFTC’s emergency stay, which would have prevented political trades through the 2024 election, after the District Court sided with Kalshi in September. As a result, the political futures market resumed activity in early October in the wake of Judge Cobb’s ruling and the D. C. Circuit Court denial, causing a spike in trade volume.
The Circuit Court has agreed to hear the CFTC’s appeal, possibly in December, when the 2024 election voting will be over.
The stakes are rising in the final days before the election as big-time financial players like Robinhood become involved, which means that more political futures are being bought and sold. Robinhood did not respond to comment for this story.
Cantrell Dumas, the director of derivatives policy at Better Markets, a nonprofit advocacy group for investor protection in finance, is one of the critics of the District Court’s decision to allow election-related trading. In a recent blog post, Dumas wrote,” It ignores the spirit of the Commodity Exchange Act and the very real threats of market manipulation and election interference.”
Wetjen said the Circuit Court’s decision regarding the CFTC’s appeal will set the table for how the federal agency proceeds. Wetjen predicted that the CFTC might “go back to the drawing board” if Kalshi wins again.
With the alleged parallels to gambling ripe for scrutiny as federal legislators have signaled eagerness to crack down on the betting industry, Congress, other federal agencies, or even individual states might follow in the future to examine political event futures trading using various legal strategies.
In September, U. S. Rep. Paul Tonko (D-N. Y… and U.S. Senator Richard Blumenthal (D-Conn. ) introduced a bill in the Senate and House of Representatives that would require states to grant the Justice Department’s consent before offering legalized gambling. It is called the Supporting Affordability and Fairness with Every Bet ( also called” the SAFE Bet Act”, H. R. 9590 and S. 5057 ), and it includes stricter consumer protection guardrails for sportsbooks to stay between than most states have created.
In an email, a Tonko company spokesman said that the company was actively checking whether to include provisions that cover political betting. The spokesperson noted that it is too early to provide a definitive response, but that a potential amendment to the proposed legislation that addresses the issue is not ruled out.
Congress could also consider a separate bill focused exclusively on election betting.
Companies can be discouraged from investing in responsible gambling [measures ] unless there is a regulatory floor that everyone has to meet, according to Whyte. They are in competition with people who do n’t because of that, and they are paying that price.
As Kalshi and fellow upstarts can amass new customers quickly, free of CFTC oversight and outside the purview of state gambling regulators, the sportsbooks are on the sidelines.
billions of dollars in potential wagers on political outcomes could continue to go to future-trading platforms, as is currently the case, or alternatively land in the hands of sportsbook operators, depending on where future court rulings and legislation come from.
Of course, there is a chance that the United States will enact laws banning both political futures trading and betting on sportsbooks. In that case, U. S. citizens could try to circumvent location restrictions to use popular offshore services like Polymarket.
Political betting and futures trading supporters claim that their outcomes can provide a useful public signal comparable to a race-related poll, and that wagers should be placed above the table as well.
Political wagers are seen by skeptics as a double threat because, according to the CFTC, they are linked to gambling addiction risks as well as the political component’s threat to democracy.
The CFTC declined a request for comment for this story, but it has outlined its views in multiple public filings.
Advocates worry that businesses will have little incentive to protect consumers if political futures are not regulated. And as long as businesses maintain that election futures are not a form of gambling, they are communicating to users that what they are providing is more skill than chance.
” There are a lot of people involved in special election betting who, because they’ve been told that it’s legally not gambling, they also assume they are not subject to the psychological impacts of gambling”, said Whyte, whose National Council on Problem Gambling views political futures as virtually indistinguishable from betting. They are less prepared to participate in these elections and trades to defend themselves. And if they do develop a problem, they have significantly less access to [safety ] tools.
FanDuel and Fanatics representatives declined to speak on the record for this story. A request for comment was not responded to by BetMGM.
A DraftKings spokesman stated in a statement that” we are dedicated to providing a legal, regulated, engaging platform that prioritizes integrity and responsible gaming, standing in stark contrast to the risks posed by illegal and unregulated offshore operators. While we recognize the demand for election betting, current regulations restrict legally offering these wagers in the U. S., which can lead consumers toward illegal offshore platforms where election betting is readily accessible”.
What was once a fringe pastime has become commonplace discourse even without the big sportsbooks, and the interest in political bets and trades is likely to grow. It is only growing, according to Lynch.
Michael McCann contributed to the reporting of this story.