Americans are addicted to gambling on elections because it’s finally legal, sort of

Qpeople can’t bet enough on the 2024 presidential election, and thanks to a recent legislative decision, it’s easier than ever for Americans to vote with their wallets.

On Polymarket, one of the top online exchanges, which people have already used betting more than $1.2 bn on the US presidential election. That includes two amazing people who bet millions with Trump’s victory.

The problems of the betting market are suddenly on the lips of US broadcasters and campaign doctors, quoted like polls and watched like weather.

Betting on elections has long been banned in the US, but various exchanges and their users have found ways to get in on the action anyway.

Federal appeals court ruled earlier on October 2 that he predicted the Kalshi market can offer US election contracts now, leading to more than $3m in political contracts in the first week. Federal regulators at the Commodity Futures Trading Commission, which concluded last year that such contracts violate commodity law, argue the event still amounts to illegal gambling or gambling, and they are seeking further appeals hearings as early as December.

Since the legal status of betting inside the US is still up for debate, another popular way to bet on the presidential race is to operate outside the US.

Eva, a software developer from the Netherlands, said Independent he has been gambling since before the 2020 election. He got into it when he was a poker player, and he is drawn to the political game for fun and because it is “profitable .” People often bet based on their party politics, giving an advantage to those who sell the odds alone.

He thinks Trump is a “danger to democracy,” but he immediately put money on the Republicans after Biden was inaugurated, because of the “crazy” 15-to-1 odds given when Trump was elected. come back then. He appreciates political gambling because of the way it sharpens your thinking, forcing you to deal with odds and possibilities rather than ideas and feelings.

“I think if more people put their money where their mouth is when it comes to politics, maybe we’ll live in a more realistic and neutral world,” he said in a letter. email, adding, “I feel like people could use some more. foundation.”

One better online, a Bulgarian political analyst based in Germany, said Independent he went into action a few weeks ago, putting 150 euros on Harris, since Trump has a “very extreme game” to win enough votes. He thinks most people should avoid gambling anyway.

“I don’t recommend politics or any kind of gambling to anyone,” he said. “It’s mostly like casinos where the house has a limit and most if not all they end up losing for a long time. It is a very risky business. ”

“If you’re good with risks and money, and you’re disciplined enough and you’re opportunistic, the rewards can be significant, but if you tick all the boxes above that’s not the case,” he added.

Among the most famous, and often mentioned, platforms is Polymarket, founded in 2020. This site allows users outside the US to bet on crypto on the outcome of future events, in including presidential elections, and there are video game shows showing top traders and what’s in their wallets. The report suggests that despite violating the site’s terms of service, many Americans use the site etc. with VPNs.

It may play like a game, but Polymarket is backed by some serious names, including right-wing Silicon Valley venture capitalist Peter Thiel, whose firm was the lead investor. with a recent turnover of $70mand election leader Nate Silver, who serves as a consultant to the company.

Regardless of where it wants to bet from, Polymarket has emerged as a shorthand for the market’s view on the US election in general, frequently quoted on Elon Musk’s X feed and news interviews. cable.

Musk tweeted earlier this month that the Polymarket poll for Trump — currently close to 62-38 for Trump — is more reliable than traditional polls. research showing him behind Harrissince “real money is at stake.”

At the other end of the spectrum are prediction markets such as PredictIt, run by New Zealand’s Victoria University, and the University of Iowa’s Electronic Markets, both of which are exempt from regulatory scrutiny. run for educational rather than commercial purposes.

Researchers say there are a number of reasons why betting markets are not like elections – which is a good thing.

“It’s not who you want to win, but what you think will happen. It’s a different question,” John Phillips, co-founder and CEO of PredictIt, said Independent.

What should not be overlooked, Phillips added, is that political betting markets are fun, not a word that is typically used to describe the highs and lows of national politics. Moreover, betting may seem like a small game, but to do it well, you need to base your moves on solid content and quality content.

“That is a good thing for democracy,” he said. “People who might be cut off have sex.”

Dr. Grant Ferguson, from the political science department of Texas Christian University, said that Independent such markets capture minute-to-minute changes in sentiment and information that may not make decisions until days later.

He said: “They can respond in real time. “If you want to track the chances of a certain candidate winning the country, you can watch how the market moves in one direction during the debate. Sometimes that can have an effect. What this means is, bettors in these markets are able to include more information than just picking. ”

What’s really interesting are times when the market and options diverge a bit, like the one we’re in now. Polymarket is strong for Trumpwhen Our poll tracker still finds Harris in the lead. According to Ferguson, the markets were also stronger for Trump than in the 2016 election, which he won in a landslide.

But this didn’t start with Trump – betting on big money elections has a long, illegal, illegal history in the US, dating back to the days of Washington, sometimes going beyond the financial markets themselves. it.

“Crowds formed in the financial district – at the Curb [Exchange] or in the lobby of the New York Stock Exchange – and traders were shouting and asking for opportunities as if they were trading securities,” experts Paul W. Rhode and Koleman S. Strumpf write in a paper on this subject. “In presidential races such as 1896, 1900, 1904, 1916, and 1924, New York Times, Sunand The world provided daily quotes from early October until Election Day. ”

Despite its unique nature, the political betting market has more hurdles than the Commodity Futures Trading Commission.

Last year, a group of Democratic senators including Elizabeth Warren warned in a letter to regulators that markets like Kalshi and Polymarket pose “a clear threat to our democracy.”

“For example, billionaires can increase their political influence by betting dramatically while at the same time contributing to a particular candidate or party,” the letter reads.

And like the world of “dark money” politics, the voting markets are essentially anonymous, with large sums only visible on the screen, if at all. The the top trader on this month’s Polymarket leaderboard by a user named Fredi9999, who made more than $1.9m, mostly on Donald Trump bets.

Others worry about the issues found in regular financial markets: insider trading, irrational runs, high-cost “whales” that change the markets themselves.

In addition, there is an expectation that the type of person who uses the political betting market – online, with money to fly, maybe in crypto – would have cooked with bias , like any other group. That could skew the predicted value of what their businesses stand for, but the Trump campaign seems to see this group as the top one.

It has been strongly confused with the online krypto-tech-finance bro nexus, with a host of the Trump campaign. fundraising in Silicon Valley, recruiting venture capitalists as his running mate, and throwing his support behind a “digital real estate” crypto project called World Liberty Financial. Only a few weeks left to see if the bet pays off.