A federal appeals court has ruled to allow betting on the outcome of U.S. Congressional elections to resume, temporarily lifting a previous order preventing New York startup Kalshi from taking bets on which political party would control the House and Senate after the November elections. While currently only offering bets on congressional races, it remains unclear if Kalshi plans to expand offerings to include the presidential election. The court stated that it may reconsider a ban if new evidence of serious harm to the public interest is presented in the coming weeks.
Kalshi’s attorney, Yaakov Roth, confirmed that the company is now free to resume taking such bets, although it was uncertain whether they had already done so. The U.S. Commodity Futures Trading Commission, which is attempting to prevent political betting, declined to comment on the ruling. Kalshi is seeking government approval and regulation of political bets, but the commission contends that such bets are susceptible to manipulation and could undermine confidence in the integrity of American elections.
A federal court had previously ruled in favor of Kalshi, allowing the company to take $50,000 worth of bets before an appeals panel issued a freeze. The freeze was lifted on Wednesday after the court determined that the commission had not demonstrated that irreversible harm would result from the resumption of election betting. Better Markets, a non-profit group advocating for the public interest in financial markets, expressed concern over the decision, citing potential incentives for bad actors to interfere with elections and manipulate voters outside of the democratic process.
Senator Jeff Merkley, a Democrat, criticized the court’s move, calling it a threat to democracy and the integrity of the democratic process. He argued that allowing large wagers on elections could lead to corruption aimed at influencing election outcomes. Kalshi offers yes-no bets on a variety of topics, including business and entertainment, with current bets on President Joe Biden’s approval rating, the possible ban of TikTok, and the likelihood of additional presidential debates this year.
In light of the upcoming 2024 Election, the controversy surrounding election betting raises concerns about the impact on democratic processes and public trust in elections. Advocates for election integrity warn that allowing bets in the final weeks of an election cycle could have potential long-lasting repercussions on the public interest. The debate between regulating political betting to prevent manipulation and protecting the integrity of election processes remains ongoing in the wake of the court’s decision to temporarily lift the ban on betting on U.S. Congressional elections.
