ATLANTIC CITY, N.J. (AP) — Amid the explosion of legal gambling in the United States, some things have remained off-limits, including betting on the outcome of U.S. elections.
But that could be about to change.
A federal judge in Washington has overturned a decision by the Commodity Futures Trading Commission that barred a company from offering what amounted to bets on the outcome of congressional elections.
Last Friday, U.S. District Court Judge Jia Cobb ruled in favor of New York-based Kalshi but did not elaborate on her reasoning.
The judge suspended consideration of the case until a hearing scheduled for Thursday, at which the court is likely to provide reasons for its decision. It could also rule on the agency’s request for a two-week delay in the case.
“The commission lost, in all fairness, on the legal front,” Kalshi wrote in a court filing. “It should not be allowed to snatch a procedural victory from the jaws of defeat by dragging things out” until congressional elections this fall.
“As the election approaches, Kalshi and the public deserve access to the contracts that the CFTC has blocked for far too long,” the company wrote.
No U.S. jurisdiction has authorized election betting, and several states explicitly prohibit it.
But such bets are easily accessible to players using foreign websites; the practice of election betting is widespread in Europe.
In a Sept. 20, 2023, ruling, the commission told Kalshi that it could not offer yes-no prediction bets on which party would control the House of Representatives and the Senate, ruling that doing so constituted illegal gambling activity contrary to the public interest.
Such bets “could potentially be used in ways that negatively impact the integrity of elections, or the perception of the integrity of elections – for example, by creating financial incentives to vote for particular candidates,” the agency wrote.
Kalshi officials did not respond to requests for comment Tuesday and Wednesday. A lawyer representing them in the case referred a request for comment to the company. Lawyers representing the commission also did not respond to a message seeking comment.
If the judge had not agreed to stay the case until at least Thursday, Kalshi would have been free to list and accept money from clients on his congressional markets.
It was not immediately clear whether it or other companies would also seek to offer betting on other elections, including the presidential race.
In 2020, several of the country’s major bookmakers told The Associated Press they would be eager to take bets on the U.S. presidential election if it were legal.
Vice President Kamala Harris was listed Wednesday as a slight favorite to win the election by many European bookmakers, who gave her a 54% to 55% chance of winning after her performance in Tuesday night’s debate.
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