
Despite recent confrontations with regulators, election markets can provide more accurate insights into public sentiment than polls, according to industry observers.
In May 2024, the United States Commodity Futures Trading Commission (CFTC)proposed a rule to ban derivatives used to bet on the outcome of US elections and other major real-world events.
The CFTC’s proposal drove US-based regulated prediction market platform Kalshi to take the commission to court. Columbia District Judge Jia Cobb rejected the CFTCs proposal, stating that “Kalshi’s contracts do not involve unlawful activity or gaming. They involve elections, which are neither.”
The CFTC attempted to appeal the decision, with an appellate court even imposing a temporary block on the market, but the court denied the CFTC proposal on Oct 2, and the platform has resumed trading.
Regulators’ initial concern was over the potential for manipulation, but some industry observers state that prediction markets may make better metrics of public opinion than traditional polls.
Harry Crane, a statistics professor at Rutgers University,commented on the CFTC portal’s proposal by claiming that “event contract markets are a valuable public good for which there is no evidence of significant manipulation or widespread use for any nefarious purposes that the Commission alleges.”
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Direct link to the 2024 POTUS election bet:
https://kalshi.com/markets/pres/presidential-elections