Proposal to Expand Political Betting Could Up the Ante on Control of Congress

Handicapping control of Congress is always a risky proposition, with multiple forces at work and much at stake in terms of policy and power. Now tens of millions of dollars could be riding on the outcome of House and Senate races as well.

The Commodity Futures Trading Commission is weighing a proposal from a New York-based exchange that would allow derivatives trading on the question of which party will control Congress, potentially turning Election Day into a political version of the Super Bowl.

Backers of the plan, which was proposed by the trading platform Kalshi, say it is simply another way for big firms to limit risk by hedging against possible adverse policy outcomes on issues such as taxes, energy and the environment that turn on which party holds sway in the House and Senate. They say it could also provide reliable data on the public view of elections that rivals or outperforms conventional polling.

But the prospect of big firms laying up to $100 million on the line worries lawmakers and Wall Street watchdogs, who say it could lead to widespread gambling on politics in the United States and pose a threat to election confidence at a time when many Americans already harbor suspicions about electoral outcomes.

“I just think this is hugely damaging to democracy, to have a monetary incentive,” said Senator Jeff Merkley, Democrat of Oregon and one of a bloc of senators in his party who oppose the plan.

The effort by Kalshi, which already hosts trading on the outcome of real-world events such as when the Hollywood writers strike might end and whether there will be a government shutdown, is the latest in a push to allow more speculation on political contests, on which traditional betting is generally prohibited.