Political betting could soon be legal—and it’s the last thing this election needs

As if elections in the United States weren’t already poisoned by money, there may soon be yet another way for people to pour theirs into the process. Late last week, a federal judge cleared the way for Kalshi, a startup exchange dedicated to “trading on the outcome of future events,” to take bets on which political party will control the House and Senate after the November election. Shortly thereafter, electronic brokerage firm Interactive Brokers announced that it, too, would allow its 3 million clients to bet on whether Vice President Kamala Harris or former President Donald Trump will win the White House this fall.  Together, these developments at last yielded an answer to the question of how this country’s political environment could possibly get more fraught and toxic: by empowering people to unlock their phones, open an app, and bet their life savings on it. A federal appeals court quickly stepped in to allow the Commodity Futures Trading Commission (CFTC), the agency that had sought to block Kalshi from offering election betting, a chance to make its case on appeal. Kalshi temporarily paused trades in its election-related futures contracts, albeit after handling at least 50,000 of them in the hours the market was live.  But the up-to-the-minute online status of any given broker is less important than the direction in which the market is hurtling right now: People who want to make money have spent six years watching legalized sports gambling rake in billions of dollars, and are pushing hard to legalize gambling on elections, too. At this point, it feels like the most pertinent question is not if they’ll succeed, but whether they’ll do so in time to accept bets on the one happening in roughly six weeks. BETTING ON DEMOCRACY Anyone who has watched gambling swallow sports media whole understands how grimy and dystopian this could become if left unregulated: As sports betting gets even more integrated into live broadcasts, it’s not difficult to imagine election night coverage that includes updated odds after every projection, and promo codes for free bets during every commercial break. But gambling on how a ball bounces on a given Sunday afternoon is gambling on, at a very basic level, a relatively inconsequential form of entertainment. It’s different in kind from gambling on, say, whether the government will soon be in the midst of banning abortion care nationwide, or enacting a brutal, sprawling deportation program by this time next year.  Commodifying the future of an already-fragile democracy does not help anyone make informed decisions about whom to vote for, or how to participate more responsibly. It just means that books will make money, and voters who are angry because their candidate lost might also be poorer because their bet lost, too.  For the uninitiated, elections gambling on sites like PredictIt works like this: You pay between 1 cent and 99 cents (dynamic prices that roughly correlate to how the market perceives probability) for “shares” in potential outcomes of future events. When these markets “resolve”—when the event occurs—those who predicted correctly get $1 per share, and those who didn’t get nothing. For example, if you buy 1,000 shares of Harris to win the 2024 election for $0.57 apiece, and she indeed wins, your $570 investment would turn into $1,000. If you’d had the foresight to buy those same shares back on June 25, when President Joe Biden was still the nominee and Harris was trading at a mere 3 cents per share, congratulations, your winnings would allow you to buy a new iPhone for the cost of its case. Politics betting is generally banned in the U.S., but as is usually the case when there is money to be made off of suckers willing to part with it, the market has devised a few workarounds. The CFTC permits PredictIt, a New Zealand-based, university-affiliated nonprofit, to operate on a limited basis in the U.S., ostensibly for the purposes of gathering data for academic research. Users on Polymarket, a crypto-based exchange that allows people to wager on everything from Fed rate cuts to whether Diddy will flee the country before October, have bet close to $1 billion on the 2024 presidential election as of this writing. Officially, Polymarket has been blocked in the U.S. since 2022 under the terms of a CFTC settlement, but for would-be bettors with VPN access, it’s not especially challenging to find step-by-step explainers on how to get around it.  A SPORTING CHANCE There are technical distinctions between these sites and sportsbooks, but the contours are broadly the same. As in sports betting, buying futures contracts involves outlays of money contingent on the results of upcoming events. As in sports betting, the odds move with the market. And as in sports betting, the house takes a cut: PredictIt, for example, charges a 10% fee on profits, and a 5% one to process withdrawals. The only meaningful difference is the real-world outcome that allows y