A group of Democratic lawmakers urged the U.S. Commodity Futures Trading Commission on Monday to finalize and implement its proposed rule to ban trading on the outcome of elections.
In May, a divided CFTC voted to approve a proposed rule, which doubled down on its contested position that this activity is illegal gambling. The extended deadline for public comments is later this week.
“Election gambling fundamentally cheapens the sanctity of our democratic process,” the Democrats’ letter to CFTC Chair Rostin Behnam reads. “Political bets change the motivations behind each vote, replacing political convictions with financial calculations.”
The letter was signed by Sens. Jeff Merkley, D-Ore.; Sheldon Whitehouse, D-R.I.; Chris Van Hollen, D-Md.; Richard Blumenthal, D-Conn.; and Elizabeth Warren, D-Mass. Reps. Jamie Raskin, D-Md.; John Sarbanes, D-Md.; and Eleanor Holmes Norton, D-D.C., also signed.
“Specifically, we support the commission 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 letter continues. “Political event contracts do not serve the economic purpose of futures markets, and the commission does not have the congressional mandate to regulate election and campaign activity.”
The proposed rule, which the agency’s Democrats voted for and Republicans opposed, seeks to drill down on the types of event contracts that fall under the Commodity Exchange Act and “are contrary to the public interest,” according to the agency.
This is an issue the agency has been grappling with for a while and is the subjection of ongoing litigation.
The agency is currently facing a lawsuit from online trading platform KalshiEx LLC after it told the company it could not let its users bet on the future party control of Congress.
Additionally, last year election betting platform PredictIt won a temporary injunction from the Fifth Circuit to prevent the agency from essentially shutting down its site. The case is now back at the district level.
The CFTC did not immediately respond to a request for comment about when it expects the proposed rule to be finalized.
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