- A bill has been filed in the U.S. House of Representatives to ban election betting
- U.S. Representatives Andrea Salinas (OR-06) and Jamie Raskin (MD-08) introduced the Ban Gambling on Elections Act
- Bill would amend the Commodity Exchange Act
Two U.S. House of Representatives members are looking to put an end to any momentum election betting may have gained over the last year.
U.S. Representatives Andrea Salinas (OR-06) and Jamie Raskin (MD-08) introduced the Ban Gambling on Elections Act to prohibit betting on U.S. elections. The bill would effectively amend the Commodity Exchange Act, a law regulating the trading of commodities and futures in the the country.
The introduced legislation comes less than three months after Kalshi and ForecastEx took millions of “bets” on the presidential election and DraftKings leadership expressed interest in doing the same in four years.
Election Betting Sets “Dangerous Precedent”
The bill is the House companion to U.S. Senator Jeff Merkley’s (D-OR) legislation in the Senate.
The mechanism of wagering on president outcomes, which is typically labeled as “trading event contracts,” is regulated differently than sports betting markets. Sports betting is regulated by state gaming regulators and commissions, while the prediction markets are regulated by the Commodity Futures Trading Commission.
Companies such as Kalshi will offer “contracts” to users, with prices for each contract reflecting demand from traders. Each prediction market contract matches a buyer and seller for each bet, while prices of the contracts fluctuate based on trading activity and market valuations.
In a release, Salinas said election betting incentivizes bad actors to influence or interfere with America’s elections systems.
“We cannot play roulette with our democracy by allowing this kind of wagering without a thorough accounting of the potential consequences. That is why I am proud to introduce legislation with Congressman Raskin and Senator Merkley that would ban individuals from gambling on our elections. I will also continue working to provide more federal resources for gambling addiction treatment and research. While sports betting and online gambling have become permanent forms of American entertainment, we must acknowledge and help mitigate the harm caused by related addictions,” she said.
After the election, Kalshi noted on X that it did more than $1 billion in trading volume for the election.
Federal regulators last year tried to bar users from taking contracts on elections. However, a U.S. appeals court in October allowed trading to resume on the presidential election.
DraftKings Expressed Election Betting Interest
In DraftKings’ Q3 2024 report to stockholders, CEO Jason Robins said the company would likely explore the opportunity to offer “trading event contracts” on presidential elections.
“I think it’s a very interesting thing. The dominant market within that is election markets, of course, and particularly during presidential elections. So, I know there’s a lot of attention on it over the last few weeks,” Robins said during the earnings call.
Raskin said the proposed legislation will help raise trust in the electoral system.
“With distrust in our electoral system at an all-time high, we must crack down on gambling in all U.S. elections. Our democracy demands reliable and transparent processes to cast ballots and tally results, not a horserace clouded by gambling odds and bets placed,” Raskin said.
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