Sen. Merkley Leads Group Calling for US Elections Gambling Ban

On May 10, the Commodity Futures Trading Commission (CFTC), which is charged with the regulation of the vast and complex derivatives markets, issued a Notice of Proposed Rulemaking in connection with event contracts. 

The rulemaking featured a prohibition on event contracts regarding the outcome of elections in the US. 

On Monday, Senator Jeff Merkley (D-OR) led a group of Senate and House lawmakers in pressing the CFTC to impose the gambling ban on elections in the country, signing a letter in support of the commission’s previous Notice of Proposed Rulemaking. 

Political Betting Markets Would Interfere with Elections 

Merkley was joined by Senators Richard Blumenthal (D-CT), Chris Van Hollen (D-MD), Elizabeth Warren (D-MA), and Sheldon Whitehouse (D-RI) as well as Representatives Eleanor Holmes Norton (D-DC), Jamie Raskin (D-MD), and John Sarbanes (D-MD) in urging CFTC chairman Rostin Behnam to complete and implement the proposed rule that would stop Wall Street from organizing massive political betting markets. 

According to the group, the setup of such markets would influence and interfere with the natural course of elections while further eroding public trust in democracy. 

In the text of the letter, the group of lawmakers expressed support for the CFTC “in finding that the outcome of a political contest, including an election, constitutes ‘gaming,’ and is as such contrary to the public interest and may not be listed on CFTC regulated markets.”

The group went further to say that political event contracts “do not serve the economic purpose of futures markets,” adding the Commission does not hold the congressional mandate needed to regulate specific election and campaign activities. 

Senate and House representatives led by Senator Merkley also emphasized the fact that betting or wagering on the outcome of an election “is already prohibited by well over a dozen states nationwide,” arguing that providing these types of bets at a federal level would potentially represent “an unlawful pre-emption of State responsibilities in regulating and administering federal elections.”

Gambling on Elections “Cheapens the Sanctity” of Democratic Processes 

The lawmakers also expressed their view that voters in the fast-approaching 2024 election are already faced with a political system that enables “the richest individuals and corporations to funnel dark money into campaigns without disclosure.” 

Considering the high levels of risk related to extremism and violence and the fact that the nation continues to represent a target for foreign actors “who have sought to meddle” in the elections makes “bets waged” on the election “the last thing that voters heading to the polls need.”

Lawmakers believe voters need the kind of action proposed by the CFTC in the rule for their trust to be restored, explaining elections “are not a for-profit enterprise.”

In the absence of the rule, voters would be left wondering whether their vote truly mattered, and if the outcome of the election was under the influence of “big money bets.”

“Election gambling fundamentally cheapens the sanctity of our democratic process,” explained the letter, detailing that political bets alter voters’ motivation by replacing their political convictions with “financial calculations.”

Finally, the letter urged the CFTC to “promptly finalize and implement this rule to prevent the commodification of U.S. elections.”

In August 2023, Merkley led another letter to the CFTC, urging the agency to reject a private prediction market operator’s pending proposal that could have allowed legal gambling on US elections and their outcomes. 

Ultimately, the agency didn’t give the green light to the proposal.