The distinction between stock trading and outright gambling gets fuzzier still.

I'm David Brancaccio. On this week before the election, the online trading platform, Robin Hood,

has started allowing its customers to bet on who wins, the vice president or the former president.

It's not the first to wait into betting on U.S. elections, but it is

among the first in the U.S. to jump into a new kind of financial instrument called event contracts.

Marketplaces Nova Savo. What are those? Yeah, event contracts, as in yes or no bets on whether

something's going to happen. Now, depending on who you ask, this is either nothing more than gambling or a novel investing tool. Now, the Commodities Futures Trading Commission,

which is the agency that regulates this kind of trading known as derivatives, has gone to court

to stop election betting, but it has lost twice now. And here we are, David, with Robin Hood

launching this new product. Why are regulators trying to stop this?

So they're concerned about market manipulation and with it manipulation of voter perceptions.

But Rajiv Sedi, professor of economics at Barnard College, who has done some research on these markets,

told us that the jury is really still out, but perhaps they can be useful because

they take in new information faster than polls.

If you look at what the statistical models were saying about the 2024 election on July 18th,

they were publishing forecasts which gave Trump maybe around a 75% chance of winning and Biden 25% and

everybody else 0%. Meanwhile, markets had Biden at less than 5% and had Harris at about 22 or 23%.

Because they were anticipating that Biden would drop out, which he did. Now, Sedi also says

one upside of what's happening at

Robin Hood and at other trading firm called Kalsh is that bringing political betting under U.S.

regulatory oversight can be a good thing. Other platforms are based overseas, David.

All right, Nova, thank you. Home prices are still going up, but not as fast as they were earlier this year.

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