Last-minute legal ruling allows betting on US election

WASHINGTON: Millions of dollars have poured into bets on who will win the US election after a last-minute court ruling opened up gambling on the vote, upping the stakes on a too-close-to-call race that has already put voters on edge.

Contracts for a Harris victory were trading between 48 and 50 percent in favour of the Democrat on Friday on Interactive Brokers, a firm that has taken advantage of a legal opening created earlier this month in the country’s long-running regulatory battle over election markets. With just a month until the November 5 vote, markets opened after a court in Washington ruled that Kalshi, a startup that has been trying to introduce political betting in the United States for years, could take wagers as legal appeals by regulators against the company continue.

Within days, more than $6.3 million had been put on the line for the Harris-Trump matchup alone, with users also betting on control of the House and Senate.

It’s the latest turn in a yearslong saga between the Commodity Futures Trading Commission and firms wishing to offer election betting -- a legal practice in a number of other countries and one that some Americans participate in outside of regulators’ oversight via offshore markets. More than $1.7 billion has been placed on the Harris-Trump matchup on one such offshore site, Polymarket, where Trump held a 54 to 45 advantage over Harris Friday evening.

Those in favour of gambling -- or “event contracts” in finance terms -- say it is a legitimate way to hedge bets against adverse outcomes, likening it to futures contracts. Some also argue that the markets are better than polls.“These contracts are important,” Steve Sanders, executive vice president of marketing and product development at Interactive Brokers, told AFP. “They’re good for people to take a view on what they think is happening and hedge their portfolios.”In just days, more than 1 million contracts had been traded on Interactive Brokers. 

Only two election betting markets were legally operating in the United States before the October 2 ruling, having been granted exemptions due to their affiliation with research projects and the strict limits they placed on the amount people could bet.But critics worry about widespread election gambling in a polarized moment when basic facts are in dispute and disinformation on which people might base their wagers is abundant.