Brewer: 'Regulators Don't Have a Prayer of Regulating Elections Betting in States That Even Criminalize It'

Outside of gaming regulators being hell bent on going after social gaming sites these days, there is also lots of talk about elections betting.

And it's doubtful sites wanting to offer this type of wagering get bored after November 5.  While there might be a lull, there will always be new campaigns to place bets on.

Condessa Brewer of CNBC offered her insider knowledge of the current appetite for this sort of thing from a regulators standpoint via her LinkedIN page.

First, her original post, then an update.

Original post:

"Wonder if @NYSGamingCommission will have something to say about this. Kalshi is calling the 'trades' on its platform 'live bets.'
Kalshi does not have a gaming license. More importantly, betting on the election is not permitted in New York, nor in any state.
Voters should know this is -not- an indication of the outcome of the election."

Kalshi is also not located offshore. In fact, they are based out of Lower Manhattan.

Update:

"A legal expert tells me state gaming regulators don't have a prayer of regulating betting on elections from the likes of Kalshi, even in dozens of states that criminalize gambling on elections.  Why? Kalshi took the CFTC (Commodities Futures Trading Commission) to court and argued its prediction markets are NOT gambling.

"The court agreed (in what my source called 'A Miracle.') And while the CFTC prepares its appeal - the federal nature of this case supercedes the states. So Kalshi can call the trades whatever it wants- even betting."

And Brewer also made mention of some more recent news, that Robin Hood has suddenly become a gambling app.

"Robinhood's app download by the way says 'Robinhood: Investing for All - Now with election market'."

Matt Rybaltowski of Better Collective offered this analysis:

"The decision will probably rest with the courts when the U.S Court of Appeals for the D.C. Circuit hears the CFTC’s appeal next year. In a 59-page brief submitted last month to the circuit court, the CFTC argued that a district court judge erred in allowing Kalshi to list and trade election event contracts. At issue is whether event contracts on political betting under the Commodity Exchange Act (CEA) are properly understood to be unlawful under state law. The holding that 'unlawful activity' cannot capture election-betting contracts because the CEA preempts application of state law was “utterly circular,” the CFTC wrote. On the contrary, a ban on regulated political event contracts will accomplish nothing for election integrity, but confine all election trading activity to unregulated exchanges, Kalshi has argued".

Esteemed gambling attorney Jeff Ifrah advised this matter is not subject to state law.