Late last week, Representatives Jamie Raskin and Andrea Salinas introduced a new bill that seeks to prohibit betting on US elections. The Ban Gambling on Elections Act would amend the Commodity Exchange Act, enacted in 1936, to ban political wagering of any kind.
It is the companion to Senator Jeff Merkley’s legislation and responds to concerns that election betting could lead to the manipulation of results.
“With distrust in our electoral system at an all-time high, we must crack down on gambling in all U.S. elections,” commented Raskin.
“We cannot play roulette with our democracy by allowing this kind of wagering without a thorough accounting of the potential consequences,” added Salinas.
While political betting is already illegal in all US states where sports betting is legal, event contract wagering, which lets bettors buy stocks for their chosen outcome, is not. This type of betting, therefore, became widely popular across the States in the lead-up to the 2024 presidential election.
Close to $1 billion was wagered on the result of the 2024 election in the US alone, including $400 million through Kalshi and $538 via ForecastEx LLC, a subsidiary of Interactive Brokers Group. Meanwhile, the crypto-powered prediction market, Polymarket, is banned from operating in the US. This follows a settlement with the Commodity Futures Trading Commission in 2022.
Steve Sanders, EVP of marketing and product development at Interactive Brokers, said, “Since investors must commit capital to express their conviction, they are engaged and educated about a subject. ForecastEx delivered highly predictive, real-time data to both investors and the broader market.”