Lawmakers urge CFTC to ban betting on US elections to preserve public trust

A group of lawmakers led by Senator Jeff Merkley of Oregon has called on the Commodity Futures Trading Commission (CFTC) to ban gambling on U.S. elections. This appeal comes as part of an effort to protect the integrity of the democratic process and prevent potential influence by financial interests.

The letter, signed by Senators Richard Blumenthal (D-CT), Chris Van Hollen (D-MD), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), and Representatives Eleanor Holmes Norton (D-DC), Jamie Raskin (D-MD), and John Sarbanes (D-MD), was addressed to CFTC Chairman Rostin Behnam. 

The effort urges the CFTC to finalize and implement a proposed rule that would prohibit large-scale political betting markets which the lawmakers say could sway election outcomes and diminish public confidence 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 U.S. remains a target for foreign actors who have sought to meddle in our elections,” the lawmakers stated. 

“The last thing that voters heading to the polls need are bets waged on the outcome of that election. Voters need action, as proposed by the CFTC in this rule, to restore trust. Elections are not a for-profit enterprise. Without this rule, voters will wonder if their vote mattered, and whether the outcome of the election was influenced by big money bets.”

The lawmakers further warned that election gambling "fundamentally cheapens the sanctity of our democratic process,” with political bets changing the motivations behind each vote, "replacing political convictions with financial calculations."

"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 said.

Previously, Senator Merkley had led a similar initiative, urging the CFTC to reject a proposal by a private prediction market operator that sought to legalize gambling on U.S. election outcomes. The CFTC ultimately disapproved of the proposal.

The lawmakers' current appeal supports the CFTC’s Notice of Proposed Rulemaking issued on May 10, 2024, which includes a ban on event contracts related to U.S. elections. They argue that political event contracts do not serve the economic purpose of futures markets, and are as such contrary to the public interest and may not be listed on CFTC-regulated markets.

The group also highlighted that betting on election outcomes is already prohibited in over a dozen states. Allowing such bets at the federal level could pre-empt state responsibilities in regulating and administering federal elections, posing legal and ethical concerns.

In concluding their letter, the lawmakers urged the CFTC to prioritize public trust over potential financial gains from election betting. They stressed the importance of maintaining the sanctity of the electoral process and protecting it from being commodified by financial interests. The full text of the lawmakers’ letter to CFTC Chairman Rostin Behnam is available here.