Exploring the Complex Landscape of U.S. Election Betting

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00:00All right, now let's get into the election here.

00:07We don't touch on politics at all here on the show, generally speaking, we never do.

00:12But our direction here isn't necessarily about who the winner is, but about how we get to

00:18the winner and can you bet on it?

00:20Now there was one specific operator that was taking bets on politics and have been for

00:27a long period of time.

00:28I guess I'm surprised to see that this was their main thing was to take bets on this

00:33in some way and now they're not even doing that.

00:35So what is going on here?

00:37It basically, I guess the bottom line, Matt, is anyone taking bets on legally here in the

00:43United States on who's going to win the presidential election?

00:47That's kind of a gray area and Craig, let me just get to my endorsement here.

00:50No, of course I'm kidding.

00:52Look, politics aside, betting on politics is something that is a gray area in the US.

00:59I remember West Virginia actually tried to implement this a couple of years back and

01:02it was quickly turned off.

01:04But there are companies out there, Predict It was one of them, that was given an okay

01:11to operate and it was taking small amounts of money, right?

01:15That's why it was given this okay.

01:17Basically what this turns out to be when you're talking about betting on the election is you're

01:22trading future event contracts.

01:25In simpler terms, that could be like on this company, Calshi, that we're talking about.

01:30You can bet on what jobs numbers are going to be like.

01:33You can bet on federal rate cuts.

01:36You can bet on Grammy nominations and US elections.

01:40The problem is that the Community Futures Trading Commission rejected Calshi to offer

01:45this betting on the election for a couple of reasons.

01:50One of it is that they wanted to have a larger exchange than Predict It.

01:53Predict It was seen more of an educational product instead of a flat out betting product.

02:01But Calshi wanted to go a little bit bigger than that.

02:06They actually started to because they got this ruling that said, yes, you can go and

02:12offer this.

02:13And then quickly, within hours, an injunction came down saying, no, you can't.

02:17But within those hours, they had already started to go live on their site with election betting.

02:21They just started to say they were going to do the same.

02:25I don't know.

02:26I don't think that we will get legal US election betting from Calshi this time around, Craig.

02:33There's just too much red tape involved with it.

02:36But it's a really interesting and confusing case.

02:40When you start to talk about the Commodity Futures Trading Commission, this is the body

02:43that came down on Enron all those years ago for their weather trading and offering what

02:49they said at the time was an illegal exchange for those types of things.

02:53So this has a lot of history to it.

02:57It has a lot of deep points that are difficult to understand.

03:01But basically, betting on the election is looked at as a contract.

03:07And naturally, you've been allowed to do that in the US before.

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