While some say that prediction markets are a risk to democracy, others think they could serve the public by offering valuable insights and risk management tools.
Despite recent confrontations with regulators, election markets can provide more accurate insights into public sentiment than polls, according to industry observers.
In May 2024, the United States Commodity Futures Trading Commission (CFTC) proposed a rule to ban derivatives used to bet on the outcome of US elections and other major real-world events.
The CFTC’s proposal drove US-based regulated prediction market platform Kalshi to take the commission to court. Columbia District Judge Jia Cobb rejected the CFTCs proposal, stating that “Kalshi’s contracts do not involve unlawful activity or gaming. They involve elections, which are neither.”
