Betting on the Ballot Box: Wall Street Moves to Trade Political Elections

Within days of one another, Roundhill Investments, GraniteShares ETF Trust and Bitwise Asset Management filed proposals to launch funds tied to US election results. The products would package binary political event contracts into ETF wrappers tradable through standard brokerage accounts, potentially bringing prediction-market exposure into the financial mainstream. 

The funds are designed to gain exposure to defined election outcomes, effectively allowing investors to take positions on political results, such as a party winning the presidency or controlling Congress. The contracts trade on venues overseen by the Commodity Futures Trading Commission (CFTC) and are structured as derivatives under the Commodity Exchange Act, according to the filings.  

Legal uncertainty for political derivatives 

The proposals come as political event contracts sit at the center of a broader jurisdictional fight.  

As previously reported by Sandmark, the CFTC has defended its authority over event contracts amid clashes with state regulators. Litigation involving platforms such as Kalshi and Crypto.com's derivatives arm has tested whether such markets should be treated as federally regulated derivatives or as gambling products subject to state oversight. State-level resistance, including counteractions in Nevada, highlights how unsettled the legal perimeter remains. 

The ETF proposals signal that asset managers believe political event contracts are durable enough to anchor regulated investment products. If approved, the funds would mark a significant step in the institutionalization of election-linked trading. 

The proposals are largely aligned. Each has filed for funds tied to both the next set of midterms elections in November and the 2028 presidential election, covering party control of Congress and the White House, with distinctions between them resting more on structural design than on exposure offered. 

The ETF race may just be getting started

Analysts covering the ETF industry say the filings suggest more proposals could follow. "If this goes through...[it]...opens up huge door to all kinds of stuff," Eric Balchunas, an ETF analyst at Bloomberg, wrote on X.  

These filings are considered "potentially groundbreaking" because they attempt to move binary "event contracts" (which pay out $1 if an event happens and $0 if it doesn't) into the regulated ETF structure used by millions of retail investors. 

If courts and regulators ultimately affirm that political event contracts fall squarely within federal derivatives oversight, election gambling could feature alongside traditional asset trading.  

For now, the proposals amount to a calculated bet, not just on electoral outcomes, but on the regulatory future of political prediction markets in the US.