US Election Prediction Markets Expand Despite Legal and Regulatory Hurdles
Growing Popularity of US Election Betting
American bettors interested in elections now have access to a wider range of platforms and applications that allow them to place wagers on presidential races and other political events daily. The increasing enthusiasm for betting on US elections is reflected by notable updates from PredictIt, a prominent player in this space, which recently announced major enhancements to its platform.
PredictIt’s Legal Progress and Platform Changes
PredictIt has been at the forefront of political betting, navigating a complex legal environment with the Commodity Futures Trading Commission (CFTC). For years, the company operated under a “no-action” letter issued by the CFTC in 2014, allowing it to function as an experimental political betting site. In June, PredictIt and the CFTC reached a settlement that resolved their legal disagreements, enabling PredictIt to grow its offerings.
Key changes include the removal of the previous cap limiting event contracts to 5,000 traders. This change allows unlimited participation in outcomes related to political events. Additionally, the maximum investment per contract has increased from $850 to $3,500, aligning with federal limits on individual contributions to political campaigns. John Aristotle Phillips, PredictIt’s co-creator, emphasizes that many people are as passionate about politics as they are about sports or entertainment, which fuels interest in these markets.
Expansion by Other Prediction Markets
Beyond PredictIt, other platforms like Kalshi have entered the political betting arena. Last year, Kalshi introduced contracts on presidential election outcomes that drew substantial trading volume, running into hundreds of millions of dollars. Since then, Kalshi and similar markets have broadened their scope to cover diverse topics, including legislation and even speculative events like the possible creation of a national bitcoin reserve by Donald Trump.
Political betting is no longer confined to election cycles but has evolved into an ongoing activity throughout the year. However, the inclusion of sports betting contracts has sparked controversy and regulatory scrutiny, with some US sports betting regulators challenging platforms like Kalshi on the grounds that their offerings resemble traditional gambling. Despite this, Kalshi has successfully defended its operations in court and continues to offer these markets.
The Future of Prediction Markets
As these platforms evolve, they are increasingly offering opportunities to wager not only on politics but on a wide variety of subjects. This expansion marks a significant shift in how prediction markets are perceived and utilized, blending financial speculation with entertainment and enabling greater engagement with current events beyond traditional electoral betting.