For the first time in nearly a century, Americans can now legally and widely participate in betting on election results across the United States.

A decision by the federal appeals court early last month cleared the way for Kalshi, a regulated exchange and prediction market, to offer betting markets on the presidential race and control of Congress. The historic move allows U.S. citizens to bet on key political outcomes, including which party will control the Senate and House of Representatives, as well as the hotly contested presidential race between Donald Trump and Vice President Kamala Harris.

Kalshi aimed to establish a regulated platform for betting on election results, but its regulator, the Commodity Futures Trading Commission, rejected the proposal. The CFTC argued that such election markets could potentially compromise the integrity of elections, as stated in the petition filed. The regulator expressed concern that even a brief period of offering electoral contracts could undermine public confidence in the electoral process.

Despite these objections, the Washington DC appeals court said the CFTC was unable to provide substantial evidence demonstrating that these markets would cause significant harm to the public interest.

“Specifically, the Commission has not explained why traditional tools for regulating market manipulation would not work in the context of electoral contracts. For example, the Commission can subpoena, call witnesses and hold hearings to determine whether someone is manipulating a market. event contract,” wrote Circuit Judge Patricia Millett.

In the United States, election betting, although growing, remains significantly lower than sports betting. Kalshi reported that Americans legally bet on $123 million on the presidential election to date. This figure is dwarfed by the estimate $23.1 billion bet on Super Bowl LVIII And $2.7 billion for March Madness this year, according to the American Gaming Association.

However, given Americans’ considerable enthusiasm for sports betting, the political betting market has considerable potential for growth in upcoming election cycles. This expansion could likely lead to an increase in compliance and regulatory job opportunities within the industry.

As the industry grows and comes under increased scrutiny, there will likely be an increasing need for professionals to ensure that betting platforms meet legal and ethical standards, manage risks and adapt to the complex regulatory landscape surrounding election betting.

Commercial washing

A French trader, identified only as ‘Théo’, attracted attention for betting a huge sum $30 million for Trump’s victory in the 2024 US presidential election using Polymarket, a cryptocurrency-based prediction platform. This high-stakes bet could potentially pay out around $80 million if successful, but also carries the risk of substantial losses if Harris emerges victorious.

To strengthen his position, the trader allegedly used multiple accounts to place more than 450 individual bets ranging from $5 to tens of thousands of dollars over a 10-hour period. This method was designed to avoid rapid price increases.

Blockchain analysts have raised concerns about wash trading, an illegal manipulative trading activity in financial markets, Fortune reported.

Wash trading occurs when a trader or group of traders buys and sells the same security or financial instrument, often simultaneously or within a short period of time, with the aim of creating misleading information in the market.

The primary purposes of wash trading include artificially inflating trading volume, creating a false impression of market activity, and potentially manipulating the price of a security. This practice generally involves the same or substantially similar financial instruments and occurs between accounts with common ownership, resulting in no significant change in the trader’s market position or risk exposure.

Wash trading is prohibited by U.S. law, particularly the Commodity Exchange Act and the Securities Exchange Act of 1934, and financial regulators closely monitor markets for signs of such activity due to its distortive potential. market integrity and misleading investors.

Additionally, the IRS prohibits tax deductions for losses resulting from laundry product sales, defined as occurring within 30 days of the purchase of the same title. Although rapid buying and selling of securities can occur for legitimate reasons, they are classified as wash trades when there is an intent to manipulate the market without actual risk or change of position.

According to BloombergPolymarket is leading a in-depth review information from its users, with a particular focus on those who place large bets. This process aims to verify that all users comply with the platform’s regulations.

Compliance and Regulatory Hiring

As the election betting market continues to grow and mature, the need for robust compliance and regulatory frameworks will likely grow, driving demand for professionals in these fields across betting platforms, regulatory agencies and support sectors.

Regulators like the CFTC will need to increase their staffing levels to monitor and enforce compliance in this new market. This could create employment opportunities for regulatory specialists.

The evolving legal landscape surrounding election betting could create a demand for attorneys specializing in gaming and election law to help businesses navigate a complex regulatory environment.

Betting platforms will likely need to strengthen their compliance teams to ensure they comply with new regulations and maintain appropriate oversight of their users. This could include hiring experts in Know Your Customer procedures and anti-money laundering practices.

As the market grows and attracts larger bets, platforms will need to hire additional risk management professionals to monitor possible market manipulation or other fraudulent activity.

To maintain the integrity of betting markets and prevent manipulation, platforms will need to hire data analysts to monitor betting patterns and investigate suspicious activity.

With restrictions on US users for some platforms, like Polymarket, there will likely be an increased need for professionals who can verify user identities and ensure compliance with geographic restrictions.

The development and implementation of regulatory technology solutions specific to election betting could create jobs for software developers and compliance technology specialists.