The upcoming midterm elections may have another source of chaos this year: the collision of state laws on election betting with election event contracts on prediction markets.
Several states have as-yet-untested laws which allow for election challenges based on voters or voting officials having “bets or wagers” on elections. These laws are different in key ways from the sports betting laws currently being litigated, and so they may not be preempted even if the prediction markets—such as Kalshi and Crypto.com—and Commodity Futures Trading Commission win their preemption arguments against state gambling regulators regarding sports betting.