As if elections in the United States weren’t already poisoned by money, there may soon be yet another way for people to pour theirs into the process. Late last week, a federal judge cleared the way for Kalshi, a startup exchange dedicated to “trading on the outcome of future events,” to take bets on which political party will control the House and Senate after the November election. Shortly thereafter, electronic brokerage firm Interactive Brokers announced that it, too, would allow its 3 million clients to bet on whether Vice President Kamala Harris or former President Donald Trump will win the White House this fall. 

Together, these developments at last yielded an answer to the question of how this country’s political environment could possibly get more fraught and toxic: by empowering people to unlock their phones, open an app, and bet their life savings on it.

A federal appeals court quickly stepped in to allow the Commodity Futures Trading Commission (CFTC), the agency that had sought to block Kalshi from offering election betting, a chance to make its case on appeal. Kalshi temporarily paused trades in its election-related futures contracts, albeit after handling at least 50,000 of them in the hours the market was live. 

But the up-to-the-minute online status of any given broker is less important than the direction in which the market is hurtling right now: People who want to make money have spent six years watching legalized sports gambling rake in billions of dollars, and are pushing hard to legalize gambling on elections, too. At this point, it feels like the most pertinent question is not if they’ll succeed, but whether they’ll do so in time to accept bets on the one happening in roughly six weeks.

BETTING ON DEMOCRACY

Anyone who has watched gambling swallow sports media whole understands how grimy and dystopian this could become if left unregulated: As sports betting gets even more integrated into live broadcasts, it’s not difficult to imagine election night coverage that includes updated odds after every projection, and promo codes for free bets during every commercial break. But gambling on how a ball bounces on a given Sunday afternoon is gambling on, at a very basic level, a relatively inconsequential form of entertainment. It’s different in kind from gambling on, say, whether the government will soon be in the midst of banning abortion care nationwide, or enacting a brutal, sprawling deportation program by this time next year. 

Commodifying the future of an already-fragile democracy does not help anyone make informed decisions about whom to vote for, or how to participate more responsibly. It just means that books will make money, and voters who are angry because their candidate lost might also be poorer because their bet lost, too. 

For the uninitiated, elections gambling on sites like PredictIt works like this: You pay between 1 cent and 99 cents (dynamic prices that roughly correlate to how the market perceives probability) for “shares” in potential outcomes of future events. When these markets “resolve”—when the event occurs—those who predicted correctly get $1 per share, and those who didn’t get nothing. For example, if you buy 1,000 shares of Harris to win the 2024 election for $0.57 apiece, and she indeed wins, your $570 investment would turn into $1,000. If you’d had the foresight to buy those same shares back on June 25, when President Joe Biden was still the nominee and Harris was trading at a mere 3 cents per share, congratulations, your winnings would allow you to buy a new iPhone for the cost of its case.

Politics betting is generally banned in the U.S., but as is usually the case when there is money to be made off of suckers willing to part with it, the market has devised a few workarounds. The CFTC permits PredictIt, a New Zealand-based, university-affiliated nonprofit, to operate on a limited basis in the U.S., ostensibly for the purposes of gathering data for academic research. Users on Polymarket, a crypto-based exchange that allows people to wager on everything from Fed rate cuts to whether Diddy will flee the country before October, have bet close to $1 billion on the 2024 presidential election as of this writing. Officially, Polymarket has been blocked in the U.S. since 2022 under the terms of a CFTC settlement, but for would-be bettors with VPN access, it’s not especially challenging to find step-by-step explainers on how to get around it. 

A SPORTING CHANCE

There are technical distinctions between these sites and sportsbooks, but the contours are broadly the same. As in sports betting, buying futures contracts involves outlays of money contingent on the results of upcoming events. As in sports betting, the odds move with the market. And as in sports betting, the house takes a cut: PredictIt, for example, charges a 10% fee on profits, and a 5% one to process withdrawals. The only meaningful difference is the real-world outcome that allows you to cash out: whether the Bengals-Chiefs game hits the over, or whether Trump gets to incite his racist pogroms from the comfort of the Oval Office. 

Proponents of legalization often cite the putative value of the data these markets can provide, especially given the challenges associated with traditional polling. They argue that by requiring participants to take a financial stake in the outcome, sites like PredictIt generate more accurate insights about public opinion. Others frame elections betting as a tool for institutions (or even individuals) to hedge against the possibility of an unfriendly political climate in the not-so-distant future. If you are, say, an importer of Chinese-manufactured goods facing the possibility of devastating tariffs under a Trump administration, buying shares in a slight-underdog Trump victory could offset those losses if he indeed comes out on top in November.

I am, to put it charitably, skeptical of these assertions, which sound an awful lot like post hoc justifications for a time-honored business model that makes the people who run it very, very rich. A recent Wall Street Journal feature on Polymarket quotes one user who says that in his experience, traders on the platform tend to skew right. For all the problems with polling, it is not clear that the rent-seeking behavior of a small group of aggressively online crypto bros will generate better insights about the preferences of normal people who, bless them, have never heard of PredictIt. And for every sharp who manages to find an inefficiency to exploit, there will be many more casuals who bet on elections like football fans at the start of a new season—wagers borne not of sober, dispassionate analysis of the odds, but of their fondest hopes, no matter how unrealistic, that their team will beat them to take home the Lombardi Trophy.

TRUTH SOCIAL, PART TWO?

You don’t need to look further than the ongoing Truth Social debacle to see how the pernicious effects of die-hard fandom might warp the action. Over the past few months, Trump supporters have been eagerly buying shares of the Trump Media & Technology Group, which owns the conservative social media network Truth Social, as a one-step-removed way of rallying behind and/or lining the pockets of their preferred candidate, who himself owns more than 100 million shares. Unfortunately for them, the stock price largely reflects Trump’s fortunes on the campaign trail, which means that it has spent the past few months in a free fall. In March, when Trump effectively wrapped up the GOP nomination, Trump Media & Technology Group (which trades as DJT) hit $60 per share; in the aftermath of last week’s disastrous debate performance, it’s now around $14. 

People who in some cases have exhausted their life savings on DJT stock are not acting at the behest of a licensed broker urging them to invest in a blue-chip company with a promising growth projection. They are buying DJT stock because the politician whose initials supplied its ticker symbol is urging them to do so. And given that Trump’s officially stated position is that he can lose the election only if his enemies rig it against him, enabling people to invest in his candidacy financially as well as emotionally amounts to trimming an already-short bomb fuse down to basically nothing.

Consider recent history: Already, Republican-fueled conspiracy theories about voter fraud have forced election officials to go into hiding. Already, incensed Trump supporters felt justified in storming the Capitol to stop the certification of a presidential election that they were certain was illegitimate and stolen. If you both vote for Trump and bet big on him winning the Electoral College, how much angrier would you be if he loses? How much more susceptible would you be to the idea that he and you both were cheated out of what is rightfully his and yours? And how much likelier would you be to conclude that, between the otherwise-inevitable death of the republic under a President Harris and the now-zero balance in your savings account, you can and should do whatever is necessary to take back what belongs to you?

To be clear, I do not believe that Trump’s eventual exit from U.S. politics will make mainstream political betting a good idea. No matter who the participants are, watching presidential debates is excruciating enough without a business formal version of Pat McAfee livestreaming the proceedings on Twitch, urging viewers to buy shares at a good value before the moderator gets to the next question. But the vicious tribalism that animates Trump’s movement demonstrates the howlingly obvious dangers that lie ahead. Whether in 2025 or beyond, the chances of political violence in this country are already alarmingly high. Giving people the means to try and turn a profit off of it isn’t going to help.

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