For the first time in U.S. history, residents are now legally allowed to bet on the outcome of congressional elections. This unprecedented opportunity emerged on Thursday after a judge ruled in favor of permitting such wagers, a decision that has placed Kalshi, a New York-based startup, at the center of this groundbreaking development.
Shortly after the ruling, Kalshi began accepting bets on which political party would gain control of the Senate and House in November’s elections. The company, which offers “prediction contracts” — simple yes-or-no bets on political outcomes — is operating under a temporary allowance, as the legality of such betting remains under scrutiny by regulators.
Despite multiple requests for comment, neither Kalshi nor its attorney provided further insight into the scope of their planned offerings. It remains unclear whether the company intends to expand beyond congressional races to include wagers on the presidential election or other political events. Likewise, the ripple effects of this ruling on other industries, such as sports betting companies or online casinos, are yet to be determined.
By midday Thursday, just hours after the ruling, Kalshi’s prediction markets were already seeing significant activity. The contract predicting a Republican takeover of the Senate was priced at 76 cents, meaning a $100 bet would yield $129. On the other hand, a bet on Democratic control of the House was priced at 63 cents, with a $100 wager offering a return of $154. These prices reflect the perceived likelihood of the outcomes and fluctuate based on market activity.
However, the duration of this new betting market remains uncertain. The U.S. Commodity Futures Trading Commission (CFTC), which last year prohibited Kalshi from offering these contracts, has vowed to appeal the judge’s decision as quickly as possible.
Kalshi’s legal team has argued that their client is operating within regulatory boundaries, emphasizing the company’s efforts to legitimize political betting in a market where offshore companies have long operated without government approval. According to Kalshi’s attorney, the startup is striving to create a transparent and regulated environment for such markets, contrasting itself with foreign operators that often evade oversight.
“The company has invested heavily in building these markets,” Kalshi’s lawyer stated during Thursday’s hearing. “Millions of dollars have been poured into this effort. It would be unjust for that investment to be lost due to regulatory hurdles.”
The case highlights a growing debate about the intersection of politics, gambling, and financial markets. While political betting has been a popular activity in other countries, such as the United Kingdom, the practice has historically been restricted in the United States due to concerns about ethical implications and market manipulation. Kalshi’s efforts to gain regulatory approval signal a shift in how political outcomes might be treated in the context of market speculation.
As the legal battle unfolds, questions remain about how long Kalshi will be able to operate its congressional betting markets and whether other companies will follow its lead. For now, the company has created a new, albeit controversial, avenue for Americans to engage with the country’s political landscape in a way that combines financial risk with civic interest.
The coming weeks will be crucial not only for Kalshi but for the broader implications of political betting in the U.S., as regulators, courts, and market participants navigate this uncharted territory.
