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Why Democrats want to BAN PredictIt and other betting markets ahead of the 2024 presidential election
Democrats want to stifle election prediction betting markets Polymarket, PredictIt and others saying they're a 'threat' to democracy.
As Republican nominee Donald Trump and Vice President Kamala Harris poll within a point and the red-hot race heats up, prediction markets have been a helpful tool to gauge voter sentiment, showing which candidate people are betting on to win.
Popular platforms PredictIt and Polymarket have raked in millions worth of political prediction bets and boast a booming number of loyal users.
But their rapid growth is now in danger, as a group of Democrats is calling for betting on elections to be outlawed, saying the practice is a threat to Democracy.
'Mass commodification of our democratic process would raise widespread concerns about the integrity of our electoral process,' the lawmakers wrote in a letter, pleading with a trading regulator to ban the bets.
'Such an outcome is in clear conflict with the public interest and would undermine confidence in our political process.'
Polymarket utilizes cryptocurrency to place wagers on political outcomes such as who will win the 2024 presidential election, shown above. As of Monday morning, wagerers on platform had placed more money on Trump to win than Harris
The letter sent to Commodity Futures Trading Commission (CFTC) Chairman Rostin Benham was signed by eight Democrats.
Sen. Jeff Merkely, D-Mass., led the letter which was also signed by Democrat Sens. Elizabeth Warren, Mass., Chris Van Hollen, Md., Richard Blumenthal, Conn., and Sheldon Whitehouse, R.I., in addition to Reps. Jamie Raskin, Md., and John Sarbanes, Md.
As of Monday morning, Polymarket showed that users were backing former President Donald Trump 55 percent to Vice President Kamala Harris's 43 percent.
During the same timeframe PredictIt showed Trump up 51 percent to Harris's 50 percent.
Harris, whose campaign is just barely three weeks old, overcame former President Trump in the online prediction markets for the first time last Wednesday, getting 52 percent of the vote to Trump's 50 percent on PredictIt.
The prediction markets mirror a number of recent polls that show the vice president surging ahead of the former president.
The letter comes as the CFTC currently mulls whether or not it should allow Kalshi - a U.S. prediction market platform - to allow betting on which political party will control Congress come November.
'The CFTC has to make a determination with respect to the contracts, a decision which could effectively allow legal gambling on our elections,' the letter states. 'This is a clear threat to our democracy and elections.'
'We urge the CFTC to reject Kalshi's Congressional Contracts on which political party will be in control of each chamber of the U.S. Congress.'
Vice President Kamala Harris had higher odds of getting elected president than former president Donald Trump, according to PredictIt's numbers Monday morning
Polymarket, which has seen nearly $1 billion in wagering volume, is not allowed in the U.S. Despite this, some use virtual private networks (VPNs) to avoid U.S. restrictions by routing their connection through other countries before placing wagers
Users can also bet on non-political predictions such as whether the U.S. will enter a recession this year
The Democrats argue that wagering on the election closely resembles gambling and should be regulated as the practice is, according to the lawmakers, 'contrary to the public interest.'
Polymarket has had nearly $1 billion worth of wagers made on its platform despite the platform not allowing U.S.-based users to wager.
Still, many can get around the platforms embargo in the U.S. using a virtual private network (VPN) to trick their providers into thinking they are wagering from a location outside the country.
PredictIt, meanwhile, is allowed to operate within the U.S. as it is embroiled in an ongoing legal battle with the CFTC, which in 2022 revoked the company's legal status it first issued in 2014.
'The CFTC has never allowed a for-profit venture to operate a political event contract, nor has the agency permitted any entity to operate a political event contract of such scale,' the letter said.
Sens. Elizabeth Warren, Mass., (L) and Chris Van Hollen, Md., (R) both signed the letter to CFTC Chairman Benham calling on him to outlaw prediction market betting because it closely mirrors gambling
Besides the 2024 presidential election users can also wager on who will be the Democratic party's presidential nominee and other political competitions
'Establishing a large scale, for-profit political event betting market in the United States by approving Kalshi's requested contracts, would profoundly undermine the sanctity and democratic value of elections.'
'Introducing financial incentives into the elections process fundamentally changes the motivations behind each vote, potentially replacing political convictions with financial calculations.'
The Democrats also note how rich Americans could wager on a politician and then unfairly influence that bet by simultaneously donating large sums to prop up support for their candidate.
'For example, billionaires could expand their already outsized influence on politics by wagering extraordinary bets while simultaneously contributing to a specific candidate or party,' they wrote.
'There are strong ethics concerns as political insiders privy to non-public information could wield their inside information to profit at voters' expense.'
PredictIt's odds for who is likely to become Harris's running mate
'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 lawmakers conclude by again urging the CFTC chairman to deny Kalshi's proposal.