Betting on the US presidential election? Not so fast, warn Connecticut regulators.

August 31, 2024, 12:45 p.m. • Last updated: August 31, 2024, 12:45 p.m.

Bookmakers operating overseas and in largely illegal corners of the Internet are closely monitoring the U.S. presidential election and are giving Vice President Kamala Harris slightly better chances of winning against former President Donald Trump in November.

For bettors in Connecticut, trying to capitalize on election speculation could have its pitfalls.

Although users of platforms such as Bovada and BetOnline are able to wager huge sums on the outcome of elections, these are largely outside the control of state gambling regulators, who warn that consumers are at risk of being taken advantage of or cheated out of their winnings.

Connecticut legalized online gambling and sports betting in 2021, creating a new market that includes online casinos, sports betting and lottery games.

However, that legal market is limited to licensed platforms like DraftKings, FanDuel and Fanatics, which are regulated by the Gaming Division of the Department of Consumer Protection. As such, they are prohibited under state law from taking bets on non-sporting events – including everything from the outcome of the presidential election to Oscar winners to the color of Gatorade used in the Super Bowl.

Despite these restrictions, DCP spokeswoman Kaitlyn Krasselt said state regulators are regularly confronted with foreign and offshore betting platforms that accept bets that fall outside the scope of Connecticut's legal betting market.

In addition, unlike licensed operators, offshore providers do not pay a percentage of their profits back to the state treasury.

“There are obviously a lot of problems with that: First, they're operating here illegally,” Krasselt said. “Second, because they're operating illegally, they don't care about the self-exclusion list. That's why they're also sending these materials to people who may have voluntarily excluded themselves from legal gambling platforms in Connecticut.”

In addition, Krasselt said that while the DCP can investigate complaints about licensed gambling operators cancelling bets or failing to pay out winnings, the authorities have limited ability to take action against companies operating outside their jurisdiction.

Earlier this year, Connecticut issued a cease-and-desist order to Bovada – an online casino that offers bets not only on the outcome of the November election, but also on the color of Harris's debate outfit and the severity of Trump's sentence – after the company was found to be violating the state's gambling laws. According to the website Legal Sports Report, gambling regulators in Massachusetts, New York, New Jersey and several other states have also taken similar action against Bovada.

Krasselt said the platform complied with the letter and that attempts to register an account with a Connecticut zip code resulted in a warning that the site was unavailable.

Bovada's parent company, Hove Media, based in the island nation of Comoros off the coast of East Africa, did not immediately respond to a request for comment.

Like her legal counterparts, Krasselt said, offshore and foreign platforms tend to send a wave of promotional materials around the start of the football season in late summer, which this year happens to coincide with growing interest in the U.S. presidential election campaign.

Although there are state and federal laws against the practice, some form of betting on elections has been legal in the United States for more than thirty years.

Starting in 1993, the Commodity Futures Trading Commission allowed researchers at the University of Iowa to operate a limited-contract marketplace where people could buy and sell “stocks” based on election results and other future events, with prices fluctuating over time like stocks. In 2014, PredictIt, an online prediction market run by the University of Wellington in New Zealand, received similar permission.

Both markets are operated as non-profit organizations and have the stated mission of collecting data for research purposes, while limiting “investments” to a few hundred dollars per person.

The CFTC attempted to withdraw its letter granting PredictIt permission to operate in 2022, arguing that the site had failed to comply with previously agreed limits, but the site continued to operate after the agency's move was blocked by the U.S. Court of Appeals for the Fifth Circuit.

“The University's goal with respect to the PredictIt platform was solely to support its development as a research and educational tool for the international research community of which we are a part,” the site said in an open letter to its users last year. The man who helped bring PredictIt to the U.S., John Aristotle Phillips, grew up in North Haven and twice ran for Congress in Connecticut's 4th Congressional District.

Since Tuesday, PredictIt has been offering its users the opportunity to bet on outcomes such as the size of the electorate's lead in the Electoral College, the Senate elections in Arizona and Ohio, and whether or not President Joe Biden will resign before the end of his first term.

The most active market, the presidential election winner market, saw 35.6 million trades.