Betting on elections threatens confidence in voting and should be banned, US agency says

Allowing people to bet on the outcome of U.S. elections poses a great risk that some will try to manipulate the betting markets, which could cause more harm to the already fragile confidence voters have in the integrity of results, according to a federal agency that wants the bets to be banned.

The Commodities and Futures Trading Commission is trying to prevent New York startup company Kalshi from resuming offering bets on the outcome of this fall’s congressional elections.

The company accepted an unknown number of such bets last Friday during an eight-hour window between when a federal judge cleared the way and when a federal appeals court slammed the brakes on them.

Those bets are now on hold while the appellate court considers the issue, with no hearing scheduled yet.

At issue is whether Kalshi, and other companies, should be free to issue predictive futures contracts — essentially yes-no wagers — on the outcome of elections, a practice that is regulated in the U.K. but is currently prohibited in the U.S.

The commission warns that misinformation and collusion is likely to happen in an attempt to move those betting markets. And that, it says, could irreparably harm the integrity, or at least the perceived integrity, of elections at a time when such confidence is already low.

“The district court’s order has been construed by Kalshi and others as open season for election gambling,” the commission wrote in a brief filed Saturday. “An explosion in election gambling on U.S. futures exchanges will harm the public interest.”

The commission noted that such attempts at manipulation have already occurred on at least two similar unapproved platforms, including a fake poll claiming that…