Regulators reject proposal for election betting

In a 3-1 vote, the Commodity Futures Trading Commission (CFTC) rejected a proposal by Kalshi—an online financial exchange—of offering cash bets on congressional control.

Kalshi wanted to be the first in the country to let big investors bet up to $100 million on congressional election outcomes.

But
The CFTC, with most of its members from the Democratic party, voted against the idea.

The Chair of the Commission, Rostin Behnam, said the contracts would turn the agency into an election cop and conflict with its duty to prevent fraud.

Behnam also said betting on election outcomes is illegal.

Tarek Mansour, CEO of Kalshi, argued that the contracts could serve as a risk hedge for businesses and provide valuable data for political scientists.

The proposal by Kalshi wanted to create a new type of contract that depends on whether Republicans or Democrats win control of the House or Senate in an election year.