Kalshi sees surge in election bets after court ruling win

Prediction marketplace Kalshi has expanded its range of event contracts tied to U.S. political outcomes following a significant court victory in September. 

According to regulatory filings, Kalshi has certified over a dozen contracts since prevailing in a legal dispute with the Commodity Futures Trading Commission (CFTC). 

These contracts, known as binary options, allow traders to bet on various political events, including the upcoming U.S. presidential election, Senate races, and other notable political scenarios. 

Kalshi's flagship market, “Who will win the Presidential election?” has accumulated $14 million in total betting volume since its listing on October 7, as per data from the platform. 

Despite this growth, Kalshi still lags behind Polymarket, a decentralised prediction marketplace on the Polygon (CRYPTO:MATIC) network, which has hosted nearly $2 billion in bets related to the U.S. presidential race. 

The legal dispute began in November 2023 when Kalshi sued the CFTC after the regulator attempted to block the platform from listing political event contracts. 

The CFTC argued that election prediction markets could undermine the integrity of the electoral process. 

However, Kalshi secured a favorable ruling in September, which was upheld by a federal appeals court on October 2. 

Supporters of event contract markets, such as Harry Crane, a statistics professor at Rutgers University, defended Kalshi’s position, emphasising that these markets provide valuable insights into public sentiment without evidence of manipulation. 

Crane stated in an August letter to the CFTC, “Event contract markets are a valuable public good for which there is no evidence of significant manipulation.” 

Kalshi is not the only platform gaining traction. 

Polymarket, another major player, has become a popular venue for betting on election outcomes. 

Bloomberg recently integrated Polymarket's election odds data into its Terminal, making it more accessible to institutional investors. 

As of October 16, Kalshi's market data suggests that Donald Trump has a 55% chance of winning the presidential election, compared to 45% for Kamala Harris. 

Polymarket bettors are slightly more optimistic about Trump’s chances, placing his odds at 58% against Harris’s 41%. 

The growth of platforms like Kalshi and Polymarket demonstrates the increasing interest in election prediction markets, which analysts say may offer more accurate reflections of public sentiment than traditional polling methods. 

With ongoing legal battles and regulatory scrutiny, the future of these platforms remains under close watch as they continue to expand their reach and influence in the political betting arena.