Former president Donald Trump defeated Vice President Kamala Harris in the 2024 U.S. presidential election on Nov. 5, 2024. Voting may be over, but you can still bet on this presidential election through two popular online brokerage platforms – Robinhood and Interactive Brokers. Betting on both platforms closes on Jan. 6, 2025.
To bet on the elections, you need an account with either of these brokers and fund it using supported deposit methods. Then, you can wager on the presidential election results through a partnership with ForecastEx, a registered Designated Contract Market (DCM) and Derivative Clearing Organization (DCO) for Forecast Contracts. The concept of election betting is not new. Historically, attempts to offer such bets faced regulatory scrutiny in the U.S. But in October 2024, things changed, and now U.S. clients have multiple ways to legally participate in election betting. Key Takeaways: Election betting is wagering on the outcome of a political contest. Robinhood and Interactive Brokers offered election betting ahead of the 2024 U.S. presidential election. Election bets are placed via event contracts – derivatives for speculating on a binary outcome of an event. Which Brokers Offer Election Betting? Interactive Brokers (IBKR): IBKR rolled out election betting on Oct. 3, 2024. Through its affiliate ForecastEx, it offers ‘Forecast Contacts’ on presidential race, U.S. House and Senate majority races, and State Senate elections. Prices range from 2 cents to 99 cents per contract. Both ‘yes’ and ‘no’ contracts are available. IBKR charges no fees to trade Forecast Contracts. Election betting through IBKR closes on Jan. 6, 2025. Robinhood: Robinhood started offering election betting on Oct. 28, 2024. In partnership with ForecastEx, it announced the rollout of presidential election event contracts. Unlike IBKR, Robinhood only offers ‘yes’ contracts, allows customers to own the ‘yes’ contract for only one candidate, and charges a 1 cent commission per contract. Robinhood closes its presidential election betting on Jan. 6, 2025, with the payout date set for Jan. 8, 2025. How Election Betting Works: Election betting uses event contracts – derivative contracts for speculating on the binary outcome of a specific event like a political race. Contracts are tied to a simple ‘event question’ and a binary answer like ‘yes’ or ‘no’. Robinhood and Interactive Brokers only allow speculators to bet on two questions regarding the 2024 election: Will Donald Trump win the 2024 U.S. presidential election? Will Kamala Harris win the 2024 U.S. presidential election? You can buy a ‘yes’ or a ‘no’ contract for each question. Each contract is quoted in $0.01 increments and priced up to $1.00. Each cent represents a 1% probability that the event will occur.Understanding the betting process on the 2024 Presidential Election is crucial for those looking to participate. A correct prediction earns $1, while an incorrect one pays $0. For instance, on October 30, 2024, Interactive Brokers offered a ‘yes’ contract on Donald Trump winning for 63 cents. This implies that investing 63 cents would yield $1 if Trump wins and $0 if he loses. Conversely, a ‘no’ contract is priced at 35 cents, offering a $1 return if Trump loses or $0 if he wins. Starting your election betting journey involves opening a brokerage account. Here’s how: Step 1: Select a Broker – Compare various brokers to find one that aligns with your investment needs. Consider factors such as commissions, tradable assets, research tools, user-friendliness, and your trading style. Step 2: Register an Account – Complete the online application with your personal details, including address, Social Security number, and employment information. Step 3: Fund Your Account – Once your account is set up, fund it using any supported deposit method. Besides online brokers, Kalshi offers an alternative platform for betting on the 2024 Election. Launched in 2019, Kalshi is the first regulated prediction market exchange in the U.S. Despite ongoing disputes with the Commodity Futures Trading Commission (CFTC), which views Kalshi’s contracts as gambling potentially undermining election integrity, an interim court ruling allowed Kalshi to offer bets on the 2024 presidential race starting October 3, 2024. Frequently Asked Questions (FAQs): What Is a Brokerage Account? – A brokerage account is an investment account enabling individuals to buy and sell securities like stocks, bonds, mutual funds, and ETFs through a licensed firm. It allows for wealth growth over time, with various types of accounts catering to different financial goals. Are Brokerage Accounts Safe? – Yes, your funds are generally secure in a brokerage account. The U.S. brokerage industry is regulated by FINRA and the SEC, and accounts are insured by SIPC for up to $500,000, including $250,000 cash. However, SIPC does not cover losses due to market fluctuations. What Is Kalshi and Is It Legit? – Kalshi is an online prediction market for betting on real-world events, including economic and political outcomes. Established in 2018 and regulated by the CFTC, Kalshi is a legitimate platform for event-based trading.
Recently, Kalshi gained attention due to its dispute with the CFTC over proposed U.S. presidential election bets. While the case is still ongoing, an interim court ruling allowed Kalshi to offer such trades under strict guidelines.