US investors won’t be able to bet directly on the 2024 Congressional elections.
Contracts wagering the outcome of the contest are “contrary to the public interest,” the CFTC said.
The ruling comes with Wall Street readying for a tight election battle next year.
Retail investors won’t be able to bet on the outcome of the 2024 Congressional elections, the Commodity Futures Trading Commission has ruled.
On Friday, the top derivatives regulator blocked the retail-focused exchange Kalshi from offering contracts that would allow Americans to place wagers on the outcome of the upcoming contest.
Kalshi, which allows its customers to bet on events ranging from third-quarter US GDP growth to the upcoming Emmy awards and future moon landings, had proposed creating cash-settled, binary contracts framed around the question: “Will <chamber of Congress> be controlled by <party> for <term>?”
The financial watchdog said in a press release Friday that it had “determined the contracts involve gaming and activity that is unlawful under state law and are contrary to the public interest.”
“The contracts are prohibited and cannot be listed or made available for clearing or trading on or through Kalshi,” the CFTC added.
The regulator has previously thrown out election-based derivatives contracts, ruling back in 2012 that a similar offering created by the Nadex exchange was also against the public interest.
The ruling comes with both Main Street and Wall Street readying for a tight election battle next year.
The Republican party are battling to retain control of the House of Representatives and claw back the Senate after the Democrats held the US’s upper chamber in last year’s mid-term elections.
Investors who want to place bets on specific political events can buy or sell stocks, bonds, and currencies that they think will be affected, but politics-focused derivatives markets remain unregulated in the US.
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