Federal Judge Clears Way for Political Gambling in the US #

A federal judge has paved the way for legal political gambling in the United States, rejecting a federal watchdog’s last-minute attempt to delay a prediction market from offering bets on the November elections.

The platform launched congressional control contracts early Thursday afternoon, allowing Americans to place bets on which party will control the House and Senate in 2025. The regulatory agency, which argued that such wagers were illegal and could harm the integrity of elections, appealed the judge’s decision shortly after it was issued.

Last week, a District Judge in Washington, DC, sided with the platform in its dispute with the regulatory agency and formally released her opinion on Thursday. The judge stated that the agency exceeded its statutory authority when it blocked the platform from offering the contracts last year.

The judge wrote in her opinion that the platform’s contracts do not involve unlawful activity or gaming, but rather elections, which are neither. She also denied a request by the government during Thursday’s hearing to block the platform from offering contracts pending its appeal.

The platform had warned that pausing the ruling would be ‘devastating,’ dismissing the agency’s request as ‘an attempt to run out the clock’ and ‘win in practice even after losing in court.’ The company also pointed to the rise of an offshore, unregulated crypto-based prediction market that has grown in popularity since a recent debate.

Since the monthslong legal dispute began in 2023, the New York-based startup has insisted the contracts are in the public interest because they could provide accurate data for election forecasting and allow people to hedge their bets on different outcomes. The regulatory agency has argued that the contracts count as illegal gambling and that it doesn’t have the resources to monitor them. Its chairman has also warned that election contracts would ‘ultimately commoditize and degrade the integrity’ of the electoral process.

A co-founder of the platform celebrated the decision on Thursday, announcing that they were live. The regulatory agency declined to comment.

The agency embarked on a broader clampdown on events-based betting earlier this year, proposing a rule that would explicitly ban contracts on the outcomes of elections, awards shows and sports, among other things.

The agency’s chairman, citing a ‘significant uptick in the number of event contracts listed for trading by registered exchanges,’ said in a statement that they ‘would push the agency, a financial market regulator, into a position far beyond its congressional mandate and expertise.’

‘To be blunt, such contracts would put the agency in the role of an election cop,’ he added.