Roundhill Investments has asked the US Securities and Exchange Commission for permission to launch six ETFs that would let investors wager on US election outcomes through standard brokerage accounts — the most ambitious attempt yet to bring prediction markets into mainstream finance.
The proposed exchange-traded funds, disclosed in a filing on Feb. 13, cover presidential, Senate and House races across both parties. The tickers — BLUP, REDP, BLUS, REDS, BLUH and REDH — track funds with names like Roundhill Democratic President ETF and Roundhill Republican Senate ETF.
Each fund would hold event contracts, a class of derivatives that settle at either $1 or $0. Pick the winning party and the contract pays out. Pick wrong and the contracts settle at zero, but the fund rolls into the next election cycle and resets — presidential ETFs from 2028 into 2032, congressional funds from 2026 midterms into 2028.
“This is yet another example of pushing the ETF envelope,” said Todd Sohn, chief ETF strategist for Strategas. “ETFs are usually involved whenever there is a ‘hot’ asset or new way to gain exposure. It just takes one filing to get the ball rolling and prediction markets are the next forefront.”
Source: Dune Analytics (@datadashboards)
Note: Data as of week of Feb. 9, 2026.
The filing comes after the Commodity Futures Trading Commission on Feb. 4 formally withdrew a Biden-era proposal that would have banned political event contracts, with Chairman Michael Selig saying the prior administration had overstepped by trying to ban the contracts outright. He pledged new rules grounded in “responsible innovation.”
On Monday, Selig went further, writing in the Wall Street Journal that the CFTC would file a friend-of-the-court brief supporting Crypto.com against state regulators seeking to shut down event-contract markets. On Tuesday, the official X account of Selig posted a video warning that anyone seeking to challenge the commission’s authority would face legal action, saying: “We’ll see you in court.”
Prediction markets have already proved demand for trading election probabilities. Polymarket and Kalshi, the two dominant platforms, processed billions of dollars with weekly trading volumes surpassing $4.5 billion in February, with the 2024 presidential election serving as the breakout moment.
But those platforms still require dedicated accounts, crypto wallets or specialized on-ramps. An ETF wrapper could change the distribution math for prediction bets entirely. It would place political event contracts inside the $14 trillion US ETF ecosystem — accessible to registered investment advisers, model portfolios and self-directed retail investors through traditional brokerage platforms.
That’s the gap Roundhill is targeting. The prediction market platforms proved the concept. The ETF wrapper would provide the plumbing to scale it.
The filing makes clear that the fund aligned with the losing party “will lose substantially all of its value” on its settled contracts, before the fund reprices around the next cycle’s new positions. The volatility dynamics are more familiar to sportsbooks than traditional asset managers — sharp swings around debates, legal rulings, polling shocks and election night itself.
The filing leaves key questions unanswered, but if the SEC blesses an ETF wrapper for political event contracts, the framework could potentially extend to any binary or bounded outcome: economic data releases, geopolitical events, policy decisions, corporate earnings surprises.
“It’s difficult to see the value-add,” said Jackson Gutenplan, market structure research analyst at Bloomberg Intelligence. “The ETF wrapper provides a retail-accessible and friendly vehicle. But prediction markets are primarily a retail product, and already anyone in the US can gain economic exposure to these outcomes.”
Approval would also land in the midst of regulatory conflict. Kalshi is being sued by multiple state gaming authorities — Nevada, New Jersey and Massachusetts among them — arguing that event contracts are gambling subject to state law, not federally regulated derivatives.
The ETF industry has spent the last decade absorbing once-niche strategies into the fund structure, from volatility futures to private credit to spot Bitcoin. Each expansion tested the boundary of what the wrapper could contain while still being marketed as an investment product. Political event contracts would test that perimeter further.
Roundhill knows the terrain. The firm runs dozens of ETFs spanning AI, single-stock options strategies and the Magnificent Seven. Now, what it’s proposing isn’t a bet on companies that facilitate gambling — it’s a wrapper around the gamble itself.
