Several lawmakers from the Democratic Party are pressing the Commodity Futures Trading Commission (CFTC) to finalize a proposed rule banning gambling on US elections.

The move, led by Senator Jeff Merkley with the participation of Senator Elizabeth Warren and other key legislators, seeks to protect the integrity of the electoral process and restore public trust.

Finalizing the Ban: Lawmakers Advocate for Election Integrity

In a letter sent to CFTC Chairman Rostin Benham on August 5, these lawmakers expressed their concerns about Wall Street’s influence on election outcomes. They argue that allowing massive political betting markets could interfere with elections and further erode public trust in democracy.

“As we approach the 2024 election, voters already face a political system that allows the richest individuals and corporations to funnel dark money into campaigns without disclosure. The threat of violence and extremism is high, and the US remains a target for foreign actors who have sought to meddle in our elections,” the lawmakers wrote. 

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Furthermore, the lawmakers’ letter articulates the dangers posed by election gambling, which they believe fundamentally cheapens the sanctity of the democratic process. They argue that political bets shift motivations from political convictions to financial calculations, thus degrading public trust in elections.

“Allowing billionaires to wager extraordinary bets while simultaneously contributing to a specific candidate or party, and political insiders to bet on elections using non-public information will further degrade public trust in the electoral process,” they added.

The letter also supports the CFTC’s proposed rule by emphasizing that the outcome of political contests constitutes “gaming” and is contrary to the public interest. The lawmakers argue that political event contracts do not serve the economic purpose of futures markets and that the CFTC does not have the congressional mandate to regulate election and campaign activity. Additionally, many states already prohibit betting on elections, and offering such bets at the federal level could unlawfully pre-empt state responsibilities.

Previously, Senator Merkley has led a letter to the CFTC urging the agency to reject a proposal by a private prediction market operator to allow legal gambling on US elections. However, on his official page, Senator Merkley stated that “the CFTC ultimately disapproved of the proposal.”

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The letter does not mention specific platforms but follows a record-high for prediction market platform Polymarket. According to data from a Dune dashboard, Polymarket’s monthly volume reached $387.03 million in July. This surge is driven by heightened anticipation and discussion around the upcoming US elections in November.

Lynn Wang is a seasoned journalist at BeInCrypto, covering a wide range of topics, including tokenized real-world assets (RWA), tokenization, artificial intelligence (AI), regulatory enforcement, and investments in the crypto industry. Previously, she led a team of content creators and journalists for BeInCrypto Indonesia, focusing on the adoption of cryptocurrencies and blockchain technology in the region, as well as regulatory developments. Prior to that, at Value Magazine, she covered...