Wall Street Regulator Bans Political Election Betting in USA
In USA, the end to political election betting (at least the legal one) is now a reality.
A top Wall Street regulator has proposed outlawing election betting in the U.S. derivatives markets, warning that the activity poses a threat to the sanctity of American elections. The Commodity Futures Trading Commission (CFTC) voted 3-2 to issue a new rule proposal that would ban so-called event contracts that effectively act as bets on political elections. This plan also extends to sporting events and awards ceremonies like the Oscars.
Regulatory Decision
For over a decade, the CFTC has rejected applications to offer day traders, political junkies, and sophisticated investors the chance to bet on elections. This recent move is the strongest yet, signaling that election betting has no place in its markets. As the CFTC representative stated, “Contracts involving political events ultimately commoditize and degrade the integrity of the uniquely American experience of participating in the democratic electoral process.”
Political Election Betting – Market Reactions
The proposal has split opinions within the CFTC itself, with a narrow 3-2 vote reflecting the contentious nature of the issue.The debate over the future of political betting markets in the U.S. has intensified, with platforms like PredictIt and Kalshi challenging the CFTC’s decisions through lawsuits.
Industry Implications
Event contracts are designed to allow investors to hedge against a range of outcomes, from geopolitical risks to economic changes. With the growing interest in these products, the CFTC’s proposal could push event contract markets offshore, away from U.S. regulatory oversight, as companies seek more favorable conditions elsewhere.
The View from Europe
While the CFTC’s proposed ban targets U.S. markets, it serves as a crucial reminder for betting operators in EU to maintain robust regulatory standards and ethical practices. Our association will continue to monitor these developments closely to ensure our members are informed and compliant with best practices globally.
