(The Center Square) – U.S. Sen. Jeff Merkley, D-Oregon, is leading a coalition of his Democratic colleagues who do not want to see gambling on American elections legalized.
Along with U.S. Senators Sheldon Whitehouse, D-Rhode Island, Ed Markey, D-Massachusetts, Elizabeth Warren, D-Massachusetts, Chris Van Hollen, D-Maryland, and Dianne Feinstein, D-California, Merkley sent a letter to the Commodity Futures Trading Commission (CFTC) urging Chairman Rostin Behnam to reject a proposal from a private prediction market group that could allow for legal gambling on American elections.
A private predictions company known as Kalshi notified the CFTC in June that it wants to allow people to effectively gamble on election outcomes. Kalshi is a federally-regulated exchange where people can trade on the outcome of events, with the value of their shares increasing or decreasing depending on the probability of an event changing.
The lawmakers worry that election gambling would harm election integrity.
“There is no doubt that the mass commodification of our democratic process would raise widespread concerns about the integrity of our electoral process,” the lawmakers wrote in their letter. “Such an outcome is in clear conflict with the public interest and would undermine confidence in our political process — we urge the CFTC to deny Kalshi’s proposal.”
The letter says the CFTC prohibits event contracts that “involve, relate to, or reference” gaming or activities that are not legal under state laws as long as the CFTC determines the contract is “contrary to the public interest.”
The lawmakers think something that constitutes gambling on election outcomes would run contrary to this and be “the first time the CFTC allows a for-profit entity to offer event contracts on political events,” according to the release from Merkley’s office.
The lawmakers fear that a gambling market on elections would not only make people more skeptical of election results but also say it would result in the wealthy manipulating election results for profit.
“For example, billionaires could expand their already outsized influence on politics by wagering extraordinary bets while simultaneously contributing to a specific candidate or party,” the lawmakers wrote. “There are strong ethics concerns as political insiders privy to non-public information could wield their inside information to profit at voters’ expense. Lastly, these bets could sway the outcome of our elections, undermining the voices of voters. If citizens believe that the democratic process is being influenced by those with financial stakes, it may further exacerbate the disenfranchisement and distrust of voters already facing our nation.”
The full letter can be read here.
