- Roundhill’s ETFs let investors speculate on 2026 midterms and 2028 elections through yes/no contracts.
- Presidential, Senate, and House ETFs roll over after elections, keeping funds active for future contests.
- These ETFs bridge political betting and mainstream finance, attracting both retail and institutional traders.
Political betting is moving into mainstream finance as Roundhill Investments files for six exchange-traded funds that track U.S. election outcome bets. The move could significantly impact prediction markets.
As per a Feb. 13 filing with the SEC, the funds will invest in “yes/no”-style contracts tied to the presidential race, as well as the Senate and House elections. Roundhill is planning to launch six ETFs: Roundhill Democratic President ETF (BLUP), Roundhill Republican President ETF (REDP), Roundhill Democratic Senate ETF (BLUS), Roundhill Republican Senate ETF (REDS), Roundhill Democratic House ETF (BLUH), and Roundhill Republican House ETF (REDH).
The funds will track the elections and make their adjustments after the elections. For instance, BLUP and REDP ETFs will “acknowledge the gain or loss after the 2028 presidential election,” and then “reinvest in a series of contracts tied to the 2032 elections.”
BLUS and REDS will have contracts tied to the Senate outcome after the 2026 midterm elections, while BLUH and REDH will have contracts tied to the outcome in the House. Therefore, these ETFs have a rolling engagement in politics.
How These Political ETFs Operate
Roundhill plans to source contracts from Designated Contract Markets (DCMs), a regulatory requirement for exchange-listed derivatives. Consequently, these ETFs are designed to be transparent and compliant, offering a structured approach to political speculation.
Moreover, investors who are familiar with Roundhill’s Sports Betting & iGaming ETF (BETZ) may recognize the investment strategy. BETZ, which tracks the Morningstar Sports Betting & iGaming Select Index, holds popular sportsbook operators such as Flutter Entertainment (NYSE: FLUT) and DraftKings (NASDAQ: DKNG).
Likewise, these political ETFs could attract trading volume from retail and institutional investors who want to gain insight from the markets about the elections.
Implications for Prediction Markets
Political event contracts were traditionally the mainstay of the prediction markets prior to the emergence of sports derivatives. In addition, 2026 is a midterm election year, which is a major event. This could potentially lead to a high level of interest in the markets. However, it is not indicated exactly which markets will be used for the sourcing of the contracts.
It is apparent that these ETFs will help to fill a gap between the unofficial betting markets and the conventional financial markets.
