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Important stories about money and politics in the White House race
Millions of dollars in new bets are being placed in favor of Donald Trump in the U.S. presidential election, as emerging platforms chase bets from professional investors following the lifting of a domestic gambling ban last week.
Mr. Kalsi, whose court victory in Washington against US regulators opened up the market, offered institutional investors the opportunity to throw up to $100 million into either Kamala Harris or Mr. Trump for a November victory. There is.
According to Karshi founder Tarek Mansour, more than $12 million has been bet in the first few days after the ban was lifted, and the company is preparing to establish multiple institutional investors on the platform. By the way. That amount is expected to increase further as Election Day approaches and more traders are drawn to the platform.
The bet is structured as a so-called binary option, with an all-or-nothing wager of up to $1 per contract, with the winner keeping $1 and the loser forfeiting it. Pre-event prices fluctuate depending on the perception of its potential.
On Monday, a contract betting on Trump to win traded for 54 cents, a contract endorsing Harris traded for 47 cents, and fluctuated between 51 cents and 49 cents for each candidate in the early days of the market. The previously narrow gap widened. 1 week ago.
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Carsi and others’ ability to offer the contracts to U.S. residents stems from last week’s Court of Appeals ruling, the regulator that blocked the platform’s initial application to list election contracts in Commodity Futures Trading. The emergency suspension requested by the committee was lifted.
The observer group argued that betting on elections was akin to a game and risked undermining the integrity of the democratic process. The court ruled that the CFTC had not proven that it would harm the election and lifted the injunction. The regulator’s appeal of the lower court’s ruling in Kalsi’s favor is still ongoing.
“This is just like the futures market,” said Steve Saunders, head of marketing and product development at Interactive Brokers, which launched its own event contract in the wake of Kalsi’s court victory.
“There are those who hedge risks, and there are speculators who focus on short-term market movements. Both play an important role,” he added.
“Institutional investors may need more capital because they have unique “They may have political views, but they’re studying the consequences and that’s what their bet specifically means.” Informed opinion. ”
The lifting of the ban will effectively allow onshore exchanges to offer similar contracts for the US election that are already available on foreign and offshore crypto-based platforms.
UK-based bookmaker Betfair has bet 85 million pounds ($111 million) on the winner of the US election as of Monday. The website said total bets on US elections, including battleground states and majorities in both houses of Congress, totaled £136 million.
More than $1.9 billion has been bet on the presidential election on the offshore platform Polymarket, whose users are betting with cryptocurrencies, which technically do not allow American citizens to bet. In recent days, one user placed a large bet on Trump, pushing the former president’s approval rating to 56% and dropping Harris’ approval rating to 43%. On Monday, the pair’s percentages were 55% and 45%, respectively.
“The closeness of the races has led to a significant increase in volume in these markets, and it has also made the races even more close in each state,” said Rajiv Sethi, an economist at Barnard College, part of Columbia University. All kinds of combination possibilities exist. ”
PredictIt, a U.S. track and field site operating under a 2014 agreement for use in academic research, says the number of votes could increase tenfold as election day approaches. The platform limits users’ maximum bets to $850, but is separately challenging the CFTC’s shutdown in court.
“It would also raise interest if a well-intentioned but misguided government agency tried to shut something down,” says John Aristotle Phillips, founder of PredictIt. “These markets are not only valuable and important, and in my opinion legally and constitutionally protected, but they’re also a lot of fun. If you have any interest in gaming, it’s appealing. ”
One of the factors that influences prices on different sites can be when they are ready to declare the contest over. The presidential contract for Kalshi and PredictIt will resolve, meaning the winner will be paid, when the electoral votes are cast or the winner takes office. Polymarket is based on a time when the Associated Press, Fox News and NBC called contests for the same potential winner.
Phillips cautioned against expecting a quick resolution to the election or an end to fluctuations in contract prices.
“If history is any guide, these markets may continue to change beyond Election Day,” he added.
