The 2024 US presidential race became a seminal event in politics-finance space for the very fact that, for the very first time ever in the electoral process, people were legally eligible to place a wager on an eventual winner for a presidential campaign. This meant there was, as such, something new, bringing into debates concerning the consequence of gambling when wedded with exercises of democratic culture.
Legitimization of Betting on the Elections
In the past, U.S. elections betting marketing was not allowed for integrity and possible tampering issues. But, last October 2024, a federal appeals court in Washington D.C. unblocked the temporary freeze of election betting which now opens ways for Kalshi and other similar sites to post political outcome markets. The move is described as “a major win for the burgeoning political betting complex in the U.S.”
Kalshi is a totally regulated financial exchange, which saw the opportunity by offering contracts where it enables the user to gamble almost every form of political event and of course the presidential elections. Contracts offered hedging facilities that allowed the user to minimize risk from what political events in the future had for the company through managing some of the elections-related risks.
Bet Markets and How it Operates
Several other platforms i.e approval ratings were spot shining to be the major acts in this election betting landscape:
Kalshi:
This is a CFTC-regulated exchange, and political event contracts can be offered on this platform, thus allowing people to bet on outcomes such as which party would control Congress or who would win the presidential race. The emphasis was clearly on the role of providing implied probabilities tools for financial hedging rather than pure speculation.
Polymarket operates offshore:
One of its hottest markets includes primary elections, wherein, for the election between Donald Trump and Kamala Harris alone, over $3.3 billion was staked. Various events were represented within the politics-themed markets for that platform; thereby, reaching diversified users in addition to having several users engaged.
These platforms operate on the fact that users buy contracts based on yes-or-no questions regarding political events. A user might, for instance, buy a contract on whether Donald Trump will win the 2024 election. If the event happens, then the contract pays out an amount; if it does not, then the contract expires worthless. The binary nature of these contracts made it simple for participants to understand potential outcomes and payouts.
Public Participation and Market Fluctuations
Legal election betting became a very publicized affair. Bettors had $132 million in the stake of presidential race alone on Kalshi, shows how highly interested people are in betting on political outcomes.
Bets markets often gave an insight into public mood and what the perceived likelihood of outcomes had been. Examples would include fluctuations in election-related betting odds with the onset of the campaigns and debates and emerging news beforehand. The movements in the markets sometimes mirrored that of the more general polling data sometimes against it so gave another form of perspective on the electoral landscape.
Regulatory and Ethical Considerations
But it wasn’t without controversy: the commercialization of electoral results was roundly attacked on several fronts as a possible weakening of democratic process integrity. Representatives Jamie Raskin and Andrea Salinas, responding to their critics, sponsored the Ban Gambling on Elections Act in December 2024; this time they would sponsor a bi-partisan measure to amend the Commodity Exchange Act to ban wagering on U.S. elections.
Elected officials and the Commodity Futures Trading Commission (CFTC) struggled with the implications of election betting. Kalshi, one of the platforms, operated under CFTC regulation, but the agency was concerned that such markets may “ultimately commodify and debase the integrity” of the electoral process.This role therefore indicated the conflict of developing finance innovation and public interest.
Role of Prediction Markets
Prediction social issues markets, wherein people trade contracts on the outcomes of future events, featured prominently during the 2024 election. Such markets aggregated disparate views and information, often producing probabilistic forecasts of electoral results. For instance, throughout the campaign, the odds on Polymarket shifted according to public mood and emerging information.
Notably, as of June 2024, Nate Silver is a Polymarket advisor-a famous statistician and election forecaster. He is an affiliation that reflects how the intersection between data-driven analysis of elections and prediction markets expanded.
A new chapter in the history recent survey trends of elections and legalized election betting opened with the 2024 U.S. presidential election between Donald Trump and Kamala Harris. Although these markets opened up possibilities for financial hedging and alternative forecasting, they also raised important questions about the ethical and regulatory implications of betting on democratic outcomes. As the landscape evolves, balancing innovation with integrity will remain a critical consideration for policymakers, regulators, and participants alike.
