The US Commodity Futures Trading Commission (CFTC) worries about the rise in election outcome betting. It warns this trend could hurt public trust in elections.
CFTC Warns of Potential Election Rigging Risks Amid Kalshi Betting Dispute
The CFTC thinks people or groups might rig the betting markets. This could make voters even less confident in election fairness—a problem made worse by recent disputes.
The commission is now in a court fight with Kalshi, a New York startup. Kalshi wants to offer futures contracts on political election results. A district court ruled in Kalshi’s favor letting them take bets on upcoming congressional elections for a short time. But a federal appeals court stepped in stopping the bets while the case continued.
The CFTC’s main worry is that allowing these wagers could lead to market manipulation. They point to past events as examples of possible dangers. In 2012, a trader bet $7 million on Mitt Romney to win the presidential election. This move aimed to create the impression of a closer race to help Romney’s campaign.
Also, in 2017, a made-up poll claimed that musician Kid Rock was ahead in the Michigan Senate race. This fake news caused changes in election betting prices even though the singer never ran for office.
The CFTC claims these instances show a pattern, not isolated events, of how betting markets can be swayed to change how people view election outcomes. The agency thinks that growing election betting would make this manipulation worse and damage public trust when faith in elections is already shaky.
Kalshi Argues for Election Betting Legitimacy
Kalshi meanwhile, has stood up for its stance by highlighting that other platforms offering election prediction markets are already up and running without any regulatory oversight. The startup claims that its moves to get federal approval for its betting practices show its dedication to being open and honest. But the CFTC shot down these arguments likening the situation to a drugstore trying to sell illegal stuff by saying that such items are already out there in the black market.
As the court case plays out, people are arguing more and more about how betting on elections might affect US politics. The CFTC thinks the dangers of election betting are much worse than any good it might do so they want to stop it in all markets they control. On the other side, Kalshi says not being able to offer election bets is hurting their business, but the CFTC calls this claim an overstatement.