Court says betting on US congressional elections can resume, for now

ATLANTIC CITY, N.J. (AP) — Betting on the outcome of U.S. Congressional elections can resume, at least temporarily, a federal appeals court ruled Wednesday.

The U.S. Court of Appeals for the District of Columbia Circuit dissolved an order it had previously issued that prevented New York startup company Kalshi from taking bets on which political party would control the House and Senate after this November's elections.

The ruling clears the way for such betting to resume while the court further considers the underlying issues in the case.

So far, Kalshi has only offered bets on congressional races; it was not immediately clear whether they plan to expand offerings to include the presidential election.

The court said it could reconsider a ban if the commission provides new evidence of serious harm to the public interest in the coming weeks.

Yaakov Roth, an attorney for Kalshi, said the company is now free to resume taking such bets, but did not know if it had already done so.

No such markets were listed on the company's website as of 2 p.m., and a company spokesperson did not immediately return a message seeking comment. The U.S. Commodity Futures Trading Commission, the government agency trying to prevent such betting, declined comment.

Kalshi is seeking government approval and regulation of political bets.

But the commission denied that approval, saying that such bets are vulnerable to manipulation, and could lessen already fragile confidence in the integrity of American elections.

A federal court last month ruled in favor of Kalshi, which took about $50,000 worth of such bets in the eight hours after the ruling, until the appeals panel issued a freeze on them.

That freeze was melted on Wednesday when the court ruled that the commission did not prove that irreparable harm was likely to result from the resumption of election betting.

Better Markets, a non-profit group advocating for the public interest in financial markets, called it “a sad and ominous day for election integrity in the United States.”

“Gambling on elections will create powerful new incentives for bad actors to interfere with our elections and sway voters outside of the democratic process," said Stephen Hall, the group's legal director. “The use of AI, deepfakes and social media to manipulate voters and influence election outcomes has already become all too real. Ready access to an election gambling contract such as Kalshi’s will intensify that danger with the promise of quick profits.”

Hall said that allowing bets this late in the election cycle could open the door to potentially unfixable problems.

“There is no way to undo the potential damage to the public interest of allowing bets in the final weeks of an election year,” he said. "No matter what, we have yet another reason to be concerned about the upcoming elections.”

Likewise, a U.S. senator who has introduced a bill that would ban all elections betting, called the court's move “a bad bet for our democracy.”

“When we reduce our democracy to a horse race for the ultra-rich and huge corporations to bet on, we demolish the integrity of our democratic process and put corporate profits over people," said Sen. Jeff Merkley, a Democrat. “Allowing big wagers with the ability to put the thumb on the scale is like allowing bets on ballgames when you also control the umpire. It is corruption, plain and simple. And it is corruption aimed at the heart of our democracy.”

Kalshi offers yes-no bets on a vast array of topics, including whether Netflix will gain a certain amount of subscribers this quarter; how many vehicles Tesla will produce this quarter, and whether singer Chappell Roan will have a No. 1 hit this year.

Amid political topics, the company was taking bets Wednesday on how high President Joe Biden's approval rating will be by the end of this month; whether the U.S. will ban TikTok by May; and whether there will be a second or even a third presidential debate this year.

Follow Wayne Parry on X at www.twitter.com/WayneParryAC

As seen on a monitor in the studio Republican vice presidential nominee Sen. JD Vance, R-Ohio, and Democratic vice presidential candidate Minnesota Gov. Tim Walz participate during a vice presidential debate hosted by CBS News, Tuesday, Oct. 1, 2024, in New York. (AP Photo/Matt Rourke)

Democratic vice presidential nominee Minnesota Gov. Tim Walz speaks during a vice presidential debate hosted by CBS News, with Republican vice presidential nominee Sen. JD Vance, R-Ohio, Tuesday, Oct. 1, 2024, in New York. (AP Photo/Matt Rourke)

This combination image shows Democratic vice presidential nominee Minnesota Gov. Tim Walz, left, and Republican vice presidential nominee Sen. JD Vance, R-Ohio, right, during a vice presidential debate hosted by CBS News, Tuesday, Oct. 1, 2024, in New York. (AP Photo)

DETROIT (AP) — U.S. authorities charged five Chinese nationals with lying and trying to cover their tracks, more than a year after they were confronted in the dark near a remote Michigan military site where thousands of people had gathered for summer drills.

The five, who were University of Michigan students at the time, were not charged for what happened at Camp Grayling in August 2023. Rather they are accused of misleading investigators about the trip and conspiring to clear their phones of photos, according to a criminal complaint filed in federal court.

The FBI noted in the Tuesday court filing that there have been instances of college students from China taking photos of vital defense sites in the United States.

There was nothing in the file revealing the whereabouts of the five men.

“The defendants are not in custody. Should they come into contact with U.S. authorities, they will be arrested and face these charges,” Gina Balaya, a spokesperson for the U.S. Attorney's Office in Detroit, said Wednesday.

In summer 2023, the five were confronted after midnight near a lake by a sergeant major with the Utah National Guard. One said, “We are media,” before they collected their belongings and agreed to leave the area, the FBI said.

The FBI learned that the men had booked a room at a nearby motel a week before they were spotted outside Camp Grayling, 200 miles (320 kilometers) north of Detroit.

Four months later, one of the men was interviewed by border officers at the Detroit airport before traveling to South Korea and China. He told investigators that he and others had taken a trip to northern Michigan “to see shooting stars,” the FBI said.

A check of his external hard drive revealed two images of military vehicles taken on the same night of the encounter with the National Guard officer, the FBI said.

The other four men were interviewed last March after arriving in Chicago on a flight from Iceland. They acknowledged being in northern Michigan in August 2023, but they said it was to see a meteor shower, the FBI said.

They mentioned the National Guard officer but referred to him only as “the soldier,” a camper or “nice guy,” according to the criminal complaint.

The men last December communicated on WeChat about clearing photos from their cameras and phones, investigators said.

The FBI said all five men graduated last spring from the University of Michigan. They were part of a joint program between the university and the Shanghai Jiao Tong University in Shanghai, China.

In 2020, two Chinese nationals who were pursuing master's degrees at the University of Michigan were sentenced to prison for illegally photographing sites at a naval air station in Key West, Florida.

Follow Ed White at https://twitter.com/edwritez

FILE - This photo shows an aerial view of Camp Grayling Joint Maneuver Training Center in Grayling, Mich., July 19, 2014. (AP Photo/John L. Russell, File)