Interactive Brokers to Debut Election Betting as Kalshi Scores Legal Win
Interactive Brokers said today it will launch wagering on US election outcomes on Monday, Sept. 16 after a federal court ruled in favor of Kalshi, a prediction market operator that sought to offer event contracts on US elections.
Vice President Kamala Harris and former President Donald Trump. Interactive Brokers said today it will launch election betting on Sept. 16. (Image: Casino.org)
District Court Judge Jia Cobb recently ruled in favor of Kalashi, which the Commodity Futures Trading Commission (CFTC) previously blocked from offering election markets. The CFTC regulates the company and others like it. Kalashi sued the commission in 2023, arguing it overreached when it barred the exchange from offering cash-settled election outcome contracts. Last than two months before the 2024 presidential and congressional elections, Cobbs ruling was released. In it, the judge pointed out that the contracts offered by Kalashi are neither gaming nor an illegal act.
This case is not about whether the Court likes Kalshi’s product or thinks trading it is a good idea,” Cobb stated in her opinion. “The Court’s only task is to determine what Congress did, not what it could do or should do. And Congress did not authorize the CFTC to conduct the public interest review it conducted here.”
Soon after Cobb’s ruling, two election-related betting markets went live on Kalashi — one each on whether Democrats or Republicans will have control of the House and Senate after the Nov. 5 elections.
Interactive Brokers Election Betting Access Could Be Boon for Bettors
To date, betting in the traditional sense on US elections has been illegal in this country, but some companies have been able to get into the election game by doing things differently. For example, Polymarket has seen a surge in interest, helped in large part by the 2024 election, by allowing clients to purchase shares in an event and because the shares are an asset, the asset does not constitute a bet.
For its part, Interactive Brokers will allow clients to wager directly on the outcome of the 2024 presidential race in binary fashion, meaning they can bet either on Vice President Kamala Harris (D) or former President Donald Trump (R). The brokerage firm told the Wall Street Journal it also plans to allow betting on select swing state Senate races, though it didn’t mention which ones.
For bettors and market participants that want to invest in the 2024 election, the access provided Interactive Brokers could prove crucial. The company runs the largest electronic trading platform in the US, procession more than three million trades per day and is regulated. Interactive Brokers has more than 1.7 million client accounts, indicating there could be significant profit potential in allowing clients to wager on elections.
The demand is there. As of early August, data indicated more than $1 billion had been wagered on the US presidential race in gray market venues such as PredictIt and Smarkets.
Interactive Brokers Has Relevant Experience
Interactive Brokers has experience in finance-related event contracts. It recently launched its ForecastEx platform, which allows bets on economic data such as consumer sentiment, inflation, and the monthly jobs reports.
Other financial services firms are getting into the game, too. Earlier this year, trading house Susquehanna International Group commenced making markets on Kalashi relating to the Federal Reserve’s plans for interest rates and movie reviews.
Still, some groups believe election betting isn’t appropriate and could weaken democracy.
“Democracy in America is at a fragile crossroads, with more Americans questioning the integrity of elections than ever before” said Cantrell Dumas, director of derivatives policy at Better Markets, in a statement. “The shocking attack on the Capitol on January 6, 2021, is just one glaring example, but across the country, less visible incidents continue to chip away at the public’s confidence in our elections and democracy itself. In this shaky political moment, the last thing our country needs is for democracy to be undermined further by allowing gambling on elections.”
The post Interactive Brokers to Debut Election Betting as Kalshi Scores Legal Win appeared first on Casino.org.
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