Regulatory Roadblocks Hinder Economic Theory Testing and Political Betting Platform

The U.S. Commodity Futures Trading Commission (CFTC) has rejected a proposal by prediction market Kalshi to introduce a derivative contract tied to congressional elections, citing concerns about becoming an "election cop" and the potential for gambling on elections. The CFTC's decision reflects its consistent stance against election betting, as seen in previous rejections of similar applications. While there are arguments against prediction markets in elections, proponents argue that they provide valuable data for political scientists and could tap into the concept of crowdsourcing truth. However, the CFTC's decision raises concerns that it is stifling the prediction markets industry before it can fully develop.