Kalshi Launches US Election Betting Contracts After Court Victory

According to Cointelegraph, derivatives exchange Kalshi has introduced event contracts for betting on United States election outcomes following a significant court victory in September. Kalshi’s founder, Tarek Mansour, announced the development in an Oct. 7 post on the X platform, stating that users can now legally trade on various aspects of the US presidential election, including margin of victory and state winners. This marks the first time an election prediction market has been allowed to operate in the US, potentially opening the door for other platforms, including Web3 entities like Polymarket. Kalshi has self-certified over a dozen election betting contracts, as per the Commodity Futures Trading Commission (CFTC). These contracts are binary options with payouts linked to specific political event outcomes, such as whether a candidate will be the presidential nominee of a political party in a given election year or if a political party will win a Senate seat for a specified term. In September, Kalshi won a lawsuit against the CFTC, which had previously barred the exchange from listing political event contracts. Although the CFTC appealed the ruling and sought a temporary injunction to prevent Kalshi from listing these contracts, the court ruled in favor of Kalshi on Oct. 2. Despite this legal victory, Kalshi’s popularity remains lower compared to Polymarket, which has become the leading platform for election betting. As of Oct. 2, Polymarket has seen over $1 billion wagered on the outcome of the upcoming November US presidential election, while Kalshi’s equivalent contract has attracted approximately $775,000 in volume. The CFTC has expressed concerns that election prediction markets like Kalshi could undermine the integrity of elections. However, industry analysts argue that these markets often reflect public sentiment more accurately than traditional polls. Harry Crane, a statistics professor at Rutgers University, emphasized in an August comment letter to the CFTC that event contract markets are a valuable public good with no significant evidence of manipulation or misuse for nefarious purposes.