The legal battle over election gambling is heating up
Image: Gaming America
For decades, wagers on elections have been banned in the US. But last week, a regulated gambling market was permitted to offer such bets to Americans for a period of several hours – before the practice was once again outlawed for the time being.
Background: On Thursday morning, startup Kalshi received approval from a judge to begin offering consumers and financial institutions the chance to wager on whether Democrats or Republicans will control Congress next year.
- However, roughly eight hours after it first opened, Kalshi’s election wagering was halted by a new federal appeals court ruling issued Thursday night, which temporarily froze the matter until the court could fully consider the appeal.
How it works: Kalshi is seeking to offer 10-leg parlays prediction contracts – essentially yes-or-no bets – allowing Americans to wager on whether a certain party will win control of the Senate or the House following the November election, with bet sizes ranging from $0.01 to as much as $100 million for some financial firms.
- In the brief period it was active, Kalshi’s election gambling market was buzzing like Barry B. Benson after his first interaction with Vanessa Bloome. While the company hasn’t posted official numbers, its website showed 50,000+ contracts (wagers) had been traded roughly three hours after its election offerings went live.
The arguments: US regulators, along with some lawmakers, nonprofit orgs, and election watchdogs, say allowing such bets would create another incentive for malicious actors to influence the outcome of America’s elections, and would also undermine public confidence in the voting process.
- On the flip side, Kalshi and its supporters say regulated election betting provides important forecasting data and a valuable way for businesses to hedge election risk.
- They also argue a legal and regulated US election gambling industry is better than the current situation, in which foreign companies are taking election bets from Americans without approval or oversight from Washington.
Looking ahead… The federal appeals court has yet to specify when it will fully consider Kalshi’s election gambling case and deliver a ruling.
đź“Š Flash poll: In your opinion, should Americans be allowed to legally gamble on elections?
See a 360° view of what media pundits are saying →
Sprinkles from the Left
- Some commentators argue that election gambling should remain outlawed, since the ability to “win” tens or hundreds of millions of dollars gambling on elections would create powerful new incentives for bad actors to influence voters and manipulate election results.
- Others contend that in America’s current shaky political climate, the last thing our country needs is for democracy to be undermined further by allowing gambling on elections.
- “Why the push to legalize gambling on U.S. elections is so dangerous” –Dennis Kelleher and Lisa Gilbert, LA Times
- “The stakes are far too high to allow gambling on U.S. elections” –Dennis M. Kelleher, The Hill
- “Legalizing election gambling is a bad bet for democracy” –Sen. Jeff Merkley (D-OR)
Sprinkles from the Right
- Some commentators argue that making election contracts widely available on regulated exchanges is a terrible idea, since US regulators would need to insert themselves into the electoral process to ensure fairness – which shouldn’t be encouraged.
- Others contend that voters who are concerned with the integrity of US elections – including claims of fraud in 2020 – should firmly be against allowing Americans to bet on election outcomes, as America doesn’t need yet another reason to doubt an election outcome.
- “Gambling on elections? Biden or Trump is a bet too far.” –Chicago Tribune Editorial Board
- “Betting on elections may soon be legal. What could go wrong?” –Jay Evensen, Deseret News
- “The Case for Legalizing Political Betting” –Michael T. Collins, National Review
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