Lawmakers Target Polymarket in Effort to Ban Election Betting

A group of lawmakers, including Senators Richard Blumenthal, Chris Van Hollen, Elizabeth Warren, and Sheldon Whitehouse, along with Representatives Eleanor Holmes Norton, Jamie Raskin, and John Sarbanes, have raised concerns about the impact of election betting on public trust in democracy.

In a letter to CFTC Chairman Rostin Behnam, the legislators voiced support for a proposed rule that aims to ban event contracts tied to U.S. election outcomes. They argued, “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 believe that allowing betting markets on elections could lead to corruption and influence results, ultimately eroding voter confidence. They emphasized that elections should remain non-commercial and warned that large wagers from wealthy individuals and corporations could undermine the electoral process’s integrity.

Potential Dangers of Election Betting

The letter highlighted that election betting could fundamentally cheapen the democratic process. “Election gambling fundamentally cheapens the sanctity of our democratic process. Political bets change the motivations behind each vote, replacing political convictions with financial calculations,” they wrote. They also noted the risk of political insiders using non-public information for betting, further degrading public trust.

The lawmakers urged the CFTC to swiftly finalize and implement the proposed rule to prevent the commodification of democracy.

Polymarket, a predictions market on the Polygon blockchain, serves as a prime example of the lawmakers’ concerns. It offers transparent and diverse betting options, allowing users to buy shares using USD coin (USDC) and trade on event outcomes, including elections, sports, and crypto prices. In July, Polymarket saw significant growth, with over 1.5 million bets and a total trading volume exceeding $1 billion, driven by the U.S. presidential election debate. Data showed a 57% chance for Trump to win, attracting $54 million in bets, while Harris held a 39% chance with $38.5 million.

This surge in betting activity underscores the lawmakers’ fears about the potential impact of election betting on the democratic process.