Interactive Brokers is set to launch betting on the US election
Interactive Brokers is set to launch betting on the US election
Interactive Brokers announced today that it will launch US election betting on Monday, Sept. 16, following a federal court ruling in favor of Kalshi, a prediction market operator. The ruling allows Kalshi to offer event contracts on US elections, marking a significant shift in how political betting markets operate in the country.
This development comes after District Court Judge Jia Cobb ruled in favor of Kalshi, which had sued the Commodity Futures Trading Commission (CFTC). The CFTC had previously blocked Kalshi from offering election outcome contracts, asserting that it was outside the scope of allowable financial products. Kalshi contested this in court, arguing that the contracts were not a form of gaming or illegal activity. In her ruling, Judge Cobb pointed out that Congress had not authorized the CFTC to conduct the public interest review that led to the block, Casino.org reports.
With the ruling, Kalshi has already launched two election-related betting markets—one each on whether Democrats or Republicans will control the House and Senate after the November 5 elections. Interactive Brokers is now joining this wave, allowing clients to bet directly on the outcome of the 2024 US presidential race, as well as select Senate races in swing states.
Interactive Brokers, which runs the largest electronic trading platform in the US, with over 1.7 million client accounts and more than three million trades processed daily, will offer a significant platform for political bettors. The firm plans to allow clients to wager on a binary outcome between Vice President Kamala Harris (D) and former President Donald Trump (R) for the presidency. This could prove lucrative for the brokerage, as data from August indicated that more than $1 billion had already been wagered on the US presidential race through gray market venues like PredictIt and Smarkets.
Unlike traditional betting, where election betting remains illegal in the US, Kalshi and now Interactive Brokers have found a way to legally offer political wagering by structuring these as event contracts or assets. This structure, which operates similarly to share purchases, is regulated under financial market rules.
Interactive Brokers has already ventured into finance-related event contracts through its ForecastEx platform, which offers betting on economic data such as inflation reports and consumer sentiment. The brokerage’s entry into political markets aligns with a broader trend of financial firms expanding into event contracts. Earlier this year, Susquehanna International Group started making markets on Kalshi for Federal Reserve interest rate decisions and even movie reviews.
Despite the legal approval, some critics argue that allowing betting on elections could weaken democratic processes. Nonetheless, with increasing demand and the backing of established financial firms, political betting is poised to play a growing role in the lead-up to the 2024 US elections.
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