Business Rundown: The Election Betting Floodgates Are Open
16:48 Share

I'm Lydia Hu and this is the Fox Business Rundown. Friday, October 25th, 2024. Tens of millions of dollars have been wagered on the 2024 election as a recent legal victory has opened the floodgates for Americans to gamble on politics. People are essentially putting their money where their mouth is. And right now, as far as volume is concerned on CalSheet, we've seen a

a little over $71,656,000 put toward this race. Election gambling has been illegal in the United States until now. Earlier this month, a D.C. federal appeals court ruled in favor of the financial exchange startup CalSheet, which offered Americans the first fully regulated election prediction market. In just a few weeks, people have wagered

millions on political contracts on the site, many of which focus on the presidential race between former President Donald Trump and Vice President Kamala Harris.

And it's not just the presidential election. People can bet on which party will claim the Senate majority, which state will have the narrowest margin of victory, and much more. Attorneys for the U.S. Commodity Futures Trading Commission still believe that betting markets and the U.S. election are a volatile mix that should be illegal. They've telegraphed intentions to continue fighting to regulate the political betting space.

But in the meantime, Americans have more access and more opportunity than ever to gamble on the fast-approaching 2024 race. Well, I think the reason that we're paying so much attention to election betting now is that many people see it as...

more accurate than the polls that we're seeing out there. But really, though, election betting here in the U.S. by U.S. citizens hasn't been allowed till this October. Max Gordon is our Fox Business correspondent based in Los Angeles. You know, we have

Polymarket and CalShi, which are really the two main players in the space, one of which allows U.S. citizens to participate. The other does not. CalShi allows U.S. citizens to participate. It's now regulated by the CFTC. Polymarket only allows folks offshore to participate. But yeah, we're seeing a lot of news about this these days. So let's talk about CalShi first, because that's the one that allows Americans to participate

to participate in place these wagers do you think kamala harris is going to be the next president do you think donald trump is going to be re-elected uh... you know let's start here people are more familiar with polls and right now today if you click onto the new york times the front page is going to take you to a story about their most recent polling that shows it is a dead heat between the candidates

48% to 48% if the election were to be held today. But if you click on the Cal sheet, it's a different story, right? So what does it show us there based on the betting odds? Yeah, based off of the betting odds right now, this is taken as a snapshot in this moment, Donald Trump is currently leading by 61% to 39% Kamala Harris.

And so, you know, on the CalShe website, it shows different news articles that have been popping up, different developments, you know, in the different campaigns. And people are essentially putting their money where their mouth is. That's why the founder of CalShe, Tarek Mansour, says that it is more accurate than the polls. And right now, as far as volume is concerned on CalShe, we've seen...

A little over or a lot over $71,656,000 put toward this race. Wow. And I know when Mr. Mansoor has joined Fox Business for interviews, he has said he expects the volume to reach in excess of $100 million before we reach election day. So quite a lot of money flowing into this.

You know, it is interesting to see the difference between the betting odds and what the polling is showing us. You know, when you get polling is conducted by these polling groups, they call registered voters and they basically say, who are you going to vote for if the poll was today? So you get one call, one voter. That New York Times poll that I just mentioned, it polled roughly 2,500 people. 2,516 voters were polled for that. That shows us the 48-48 split with Kamala Harris and Donald Trump.

The difference with the betting odds, though, and Max, maybe you can help us understand this, is like what is the cap for placing a bet? And how do you know how many people are really making up that split between 61 percent in favor of Trump, I believe? Yeah, I believe so. Yeah, we're looking at 61 percent Donald Trump, 39 percent Kamala Harris. So that doesn't mean that 61 percent of people.

People favored Trump, right? So what is the difference there? Yeah. And so I don't know exactly the cap of how much you can bet per bet on CalSheet. But, you know, you're talking about a poll and you're talking about one vote, one person, right? But one person has the potential to have outsized influence when you have these types of betting markets.

You know, that's kind of where a lot of the skepticism comes in. And you have some people saying, OK, are there some ulterior motives that some folks have? Are they trying to tip the scales, make it seem like one candidate is leading more than maybe they aren't? And that's kind of the question that we've really seen kind of targeting polymarket recently, because there's been reporting about, you know, support for Trump being reflected by

What's been described as a handful of mysterious accounts. That one is offshore. Really, Americans are not supposed to be participating in this. What do we know about Polymarket and the questions that are being asked about who's participating in the flow of wagers on that platform?

Yeah, this can get all a little bit confusing. So I'll try to break down what Polymarket is. So it's essentially a crypto powered prediction market. These are both known as prediction markets, both Calchi and Polymarket. It was launched in 2020. It's actually based in Manhattan and in

In theory, it doesn't allow US users. So it's very similar to Kalshi, except folks here in the US are not supposed to be participating. Traders buy what PolyMarket calls yes or no shares, essentially tracking a particular outcome. And then the amount of buying and selling of those instruments then determines the implied probability of each outcome in each point of time.

Recently, there's been millions spent on trades in favor of Trump's return to the White House. And so a polymarket trader with the username Fred, Freddy. Oh, gosh, there's a lot of nines in here, but Freddy9999.

Well, he's wagered more than $18 million in Republican bets, essentially, and he's wagered about $13 million in favor of Trump. And so there's just a lot of eyebrows that have been raised. What is the motive here? Is this just somebody who really thinks that Trump's going to win, or is there a foreign government behind this? A lot of questions there. Right. And if we were to assume that Freddie 99999 is

is an American citizen registered to vote, if he or she were to get called by a poll, he would be one person with one vote. And that would be reflected in that poll as just one person out of that roughly 2,500 people that would be polled if he were to get called. So that just illustrates he has a lot of cash to throw into this bet. He could influence what we're seeing on Polymarket or Kelshi or whatever.

More so than just being one individual and if that person is in the US that person is not supposed to be Participating in poly market. This is only supposed to be for people outside of the US because poly market They don't want to be regulated by the CFTC so

Essentially, they were actually Polymarket was actually fined by the Commodity Futures Trading Commission in early 2022 after regulators alleged that they had offered illegal trading services. So they don't want to be regulated by the CFTC. They don't want any part of this. But

There are instructions on social media where folks can use a VPN to spoof being in a foreign country. And so, you know, there are a lot of thoughts that there are folks that are betting here in the U.S. on Polymarket.

Jason in the House, the Jason Chaffetz podcast. Dive deeper than the headlines and the party lines as I take on American life, politics and entertainment. Subscribe now on Fox News podcast dot com or wherever you download podcasts. So let's talk more about being regulated by the CFTC, because that's that really kind of brings us back to Kalshi. And what's so interesting there is Kalshi kind of has this.

What I'm saying is a victory, but we don't know how long this victory is going to last, right? Because the CFTC has made it known they're not really pleased with this activity. They think that it actually presents risks to possibly the election. They're trying to, you know, appeal this recent court decision that's allowing Kalshi to act for now and allow betting. What's happening there? What is the CFTC's concern?

Yeah. So the CFTC, they don't want to be the election police. Right. That's kind of their main concern with this. And they're worried about a lot of the things that we're talking about right now. Single individuals or maybe potentially governments pressing on the scales of the election and skewing the way that things look.

So Kalshi actually has waged this fight pretty much single handedly. They sued the CFTC asking for authority to to allow political betting or allow betting on the U.S. election. And after this legal fight, they got a favorable ruling from a federal appeals court at the beginning of this month. And so really, it's just been at this.

the beginning of this month that we've actually seen Kelshi really explode in popularity. And, you know, as we were talking about at the top, we've been seeing tons of millions in volume just on the presidential election alone, not to mention other races as well. Yeah, that's what's really interesting is that you can bet on so many other races and other topics for that matter. Yeah.

You know, I'm sure there's probably betting about the Weird World series or you can bet on who's going to win an Oscar. I mean, there's so many different topics that you can explore to your heart's desire. But you're right. Seventy million dollars since the beginning of October. We'll see what happens in these final days. Such an interesting topic. And I'm curious to know, have you spoken to people about this? Yeah. Whether they are participating. You know, you are out on the West Coast, very close to Vegas, Vegas.

Your reporting has already brought you to Vegas. What are people telling you about betting on the election? Are they into it? Well, we were in Vegas when we were reporting on this story, and we went onto the strip, and we talked to folks to ask them what they thought about it. And the majority of people, you would think Vegas is a very betting-friendly city, and a lot of people come there to gamble, but the majority of people said no.

No, I don't think that we should be betting on the election, which is very interesting to me. And one really interesting point that popped up was when I talked to one man about sports gambling and betting on the NFL. And he said, well, a lot of people think that the NFL is rigged because there's so much money involved.

And I said, OK, you know, go on. He said, well, that's only going to lead people to think that our elections are rigged because there's so much money flowing into it. Now, there is that side to it. But then, you know, you might talk to the founders of CalSheet and they say, well, the markets have already

always hedged their bets for or against certain election outcomes. Maybe it hasn't been this explicit. It hasn't been a yes or no proposition. But all sorts of policies obviously develop out of the election and out of who is elected. And so the argument is that this is simply giving everyday people the power to do what Wall Street has always done.

Such an interesting point. And I think the moral of this story is if you're paying attention to the polls or if you're paying attention to Kalshi and the betting odds, you still got to make your own plan to vote. Right. You can't be you don't let this deter you from voting. If you like what you see or you don't like what you see, you still got to have a plan to make sure you get out on November 5th.

Yeah, I think that is kind of the big takeaway for folks. You know, you kind of have to take the polls and what's going on in the betting markets as two separate entities. And then also at the end of the day, just get out there and vote your conscience. Yeah.

Since we mentioned Vegas and sports betting, I would be remiss if we didn't talk about your other big story of the day. I'm telling you guys, Max gets all the best assignments. But today you're talking about the World Series, the big game, first of which kicks off tonight here in New York, right? No, it's going to be Los Angeles. It's going to be Los Angeles? Yes.

Guys, we got to keep that because it really illustrates. I don't really know where these games are taking place, but I do know who's going to be playing. Yes, there you go. Okay, the Yankees and the Dodgers. You got that one right. You are a West Coast guy. So does that mean are you a Dodgers fan? Well, I am based in Los Angeles. I did grow up in California. I'm a Giants fan. Wow.

But you know what? If my Giants can't be in the World Series, then I got to root for our West. They are our West Coast rivals, so I am pulling for the Dodgers, much to the chagrin of many New Yorkers. But you know, the real...

you know, the focus of our story today is how expensive these tickets are for the World Series. You know, they're averaging, when you're taking all the ticket sales into account, about $1,700 per seat per game. You know, that's in contrast to last year with the D-backs, the Arizona Diamondbacks versus the Texas Rangers. And seats for that series, they averaged, well,

only about $880 or so. So about half. Now, these are according to stats from StubHub. One of the challenges that we came across in reporting out this story is that there are a lot of secondary ticket resellers and they all have different numbers. Wow. That is a pretty penny. I think it was like I caught one of your earlier reports doubled than what we've seen in prior World Series. At least last year compared to last year. Wow.

Good for them. Fox is carrying the game. It starts tonight. Thank you so much, Max. This has been such a great conversation, and we're so glad to have you. I appreciate your time. Thanks for having me on. Thanks. Hi, everybody. It's Brian Kilmeade. I want you to join me weekdays at 9 a.m. East as we break down the biggest stories of the day with some of the biggest newsmakers and, of course, what you think. Listen live or get the podcast now at briankilmeadeshow.com.