Licensed sports betting exchanges? Sure. Exchanges that are paramount to elections betting in the US? Not so fast. The federal regulatory body that approves the sales of commodities in the United States is reportedly poised to maintain the status quo in that situation.
Should the rumors prove true, people in the US will not be able to buy and sell commodities based on domestic election results on yet another platform that has levied an attempt to nail an elusive workaround for laws banning such transactions. It further puts into doubt whether the situation will ever change.
Elections betting could once again be off the board
Bloomberg reports that the Commodity Futures Trading Commission (CFTC) is set to finalize a recommendation to reject a plan by Kalshi, Inc. Kalshi, which is already registered with the CFTC, has sold commodities based on political events already.
The commodities on the exchange are event contracts. An example of such an event is presidential approval ratings. Kalshi sets a baseline value on a contract and parameters for the accompanying event, like a certain percentage for those approval ratings.
It’s akin to sports betting exchange in that for backers to realize a profit, the attached event must occur. Another event that Kalshi proposed offering commodities on was which party will control the US Congress after November 2022 elections.
CFTC staff have already recommended that the body reject the plan and the full commission rarely votes against those recommendations. The vote could come any day this week but the CFTC set a deadline for Friday, Nov. 4.
Should the CFTC vote as expected, Kalshi would be unable to offer these types of commodities. That decision would be consistent with previous CFTC actions.
CFTC has a history of similar decisions
While some states’ gambling laws ban betting on domestic elections, there is no federal law making such bets illegal. That’s been largely unnecessary to this point, however. By and large, the federal government has left gambling regulation to individual states.
When it’s come to federal regulations of commodities of this nature, the CFTC has been pretty consistent in trying to block such transactions. Earlier this year, the CFTC revoked a no-action letter that gave the exchange platform PredictIt some legal cover to offer markets on US elections.
There might be an opportunity for commodities based on foreign elections in the future, like those which exist in the United Kingdom. However, domestic elections betting is off the board for the foreseeable future. The CFTC has again seen to that.