Silicon Valley’s Wall Street Bets & the Phoenix Suns Sweepstakes

Laurene Powell Jobs
Laurene Powell Jobs attends the NBA London Game in 2019. Photo: Glyn Kirk/AFP
Theodore Schleifer
September 27, 2022

On Kalshi, a slickly-designed, legally ambitious trading platform, you can wager on whether Hurricane Ian, currently wending its way through the Gulf of Mexico, will become a Category 5 monster, and whether it will be Miami or Orlando that takes the pounding. You can bet on the water level at drought-stricken Lake Mead, on whether monkeypox will become a pandemic, or on whether NASA will return to the moon by 2025. So, asks a group of Silicon Valley super-personas, why is it that you can’t bet on whether Republicans retake the Senate?

A parade of tech industry heavyweights, including several Democratic mega-donors, are quietly pressing the case in an obscure but totally fascinating S.F. vs. D.C. political battle. For better or for worse, the group is marshaling all of their powers of elocution to persuade Washington to bring Wall Street-style trading to the world of American elections, ushering in a new era that critics fear would treat congressional races like a Vegas sportsbook.

As you might expect, Washington wants to scrutinize this newfangled arrangement. After all, it was just a few months ago that regulators delivered a kill shot to PredictIt, ordering the prediction market to shutter its service next year because it was out of compliance. The Commodity Futures Trading Commission, which regulates derivatives, signed off on Kalshi’s “events contracts” several years ago, but has expressed concern about all the second-order consequences that these political wagers in particular could have in American elections, from encouraging financial hijinks to sowing even more distrust in the integrity of American elections.