**On October 2, an appellate court removed a stay and allowed Kalshi to offer betting on U.S. elections. The CFTC’s appeal is still pending in Federal Court and oral argument begins on January 17, 2025.   

Through the media, opinion pieces, comment letters, direct engagement, and coalition building the Better Markers team has expressed our deep concerns over allowing gambling on U.S. elections and the potential threat to our democracy.

Our work includes opposing KalshiEX, LLC’s (‘Kalshi’) attempt to get the CFTC to allow traders to bet on U.S. elections via so-called “event contracts.” Based on the law, public policy, the facts, and advocacy from Better Markets and other public interest organizations, the CFTC rejected Kalshi’s request and protected democracy, markets, and investors. Kalshi then filed a lawsuit against the CFTC and the case is currently playing out in the courts, where we filed an amicus in the case.

The CFTC recently proposed a new rule on event contracts that would include a ban on betting on U.S. elections. Better Markets submitted a comment letter supporting the rule and led another letter with Public Citizen and 21 other organizations supporting the rule.

Better Markets has made several key points about Kalshi’s dangerous proposal, the lawsuit, and lawsuit and gambling on elections more broadly:

• The law expressly prohibits gaming contracts like the one proposed and, therefore, the CFTC was right to reject Kalshi’s request.  The law also requires the CFTC to reject contracts that are illegal under state law and more than a dozen states protect the integrity of elections by outlawing gambling on elections.
• Democracy and elections are foundational principles for the country and are not appropriate subjects for gambling and betting.  Just as we would not allow traders to place bets on when or where they believe the next school shooting will occur, so too must we protect our elections by refusing to allow gambling on our democratic process. Also, gambling on elections would be susceptible to manipulation and could incentivize people to engage in improper if not illegal conduct that could raise concerns about the integrity of the electoral process.
• The Kalshi proposal is another example in the deeply troubling trend toward the ‘gamification’ and ‘retailization’ of finance. In this increasingly common pattern, everyday investors are lured into new financial products and services, justified by claims that the offerings represent beneficial ‘democratization’ and ‘innovation.

Key Better Markets Materials

• Before oral arguments in the KalshiEx LLC v. CFTC appeal, Better Markets released a fact sheet providing 12 reasons why the DC circuit should uphold the CFTC’s decision on prohibiting gambling on U.S. elections.
• In a memo, the Better Markets team explained why the conventional wisdom that betting markets “nailed’ the 2024 election is misleading. The memo also examines troubling trends that prediction markets are contributing to including gambling addiction and gamification. (November 13, 2024)
• In the News: Robinhood is joining the election-betting party by offering wagers on Harris and Trump (Marketwatch, October 30, 2024)
  “Especially in these pivotal yet fragile political times, the last thing our country needs is for democracy to be undermined further by allowing gambling on elections. And investors will suffer in droves, as these markets are risky, easy to manipulate, and perfect vehicles for the popular ads and apps that make such wagering so tempting and for some, so addictive. It’s even worse, since these contracts serve no reliable, legitimate financial purpose – there’s no gain to offset the harm,” Stephen Hall, legal director and securities specialist at Better Markets, wrote in a statement.
• Amicus Brief: Appellate Court Must Protect Democracy, Investors, and the CFTC by Prohibiting Gambling on Elections (October 24, 2024)
• Release: Court Takes Dangerous Step of Allowing Bets on National Elections Before Appeal is Heard (October 2, 2024)
• In the News: Court says betting on US congressional elections can resume, for now (Associated Press, October 2, 2024)
  “Gambling on elections will create powerful new incentives for bad actors to interfere with our elections and sway voters outside of the democratic process,” said Stephen Hall, the group’s legal director.
• Fact Sheet: Gambling on Elections & Event Contracts (September 10, 2024)
• In the News: U.S. looks to ban election betting as traders flock to prediction sites (Washington Post, August 17, 2024)
  “Right now, American democracy is already in a fragile state,” said Cantrell Dumas, the director of derivatives policy for Better Markets, which opposed Kalshi’s proposal. “If you’re a politician, would you want someone to bet on your election?”
• Comment Letter to the CFTC supporting proposed ban on Political Event Contracts (August 8, 2024)
• Joint Comment Letter to the CFTC: Better Markets was joined by 22 organizations and individuals supporting the CFTC’s proposal on event contracts (August 8, 2024)
• In the News: Political Wagers Are Soaring in a Volatile US Election Season (Bloomberg, August 2, 2024)
• In the News: Meet the Traders Making Money Off the Trump Shooting and Biden’s Stumbles (WSJ, July 19, 2024)
  “We’re at a pretty low point in our country’s history in terms of the public’s trust and confidence in our elections,” said Dennis Kelleher, president of Better Markets, a group that advocates for tighter financial regulation and supports the CFTC’s stance on election bets. Betting on elections “would add fuel to a fire that people are already trying to contain,” he added.
• In the News: Betting on unknown future events may be the next big thing in hedging your investments (MarketWatch, July 8, 2024)
• Op-ed in Los Angeles Times: Why the Push to Legalize Gambling on Elections is so Dangerous (May 28, 2024)
• Statement: We applauded the CFTC for taking steps today to clarify and strengthen the rules governing event contracts and specifically election gambling contracts (May 10, 2024)
• Substack: We Can’t Afford to Gamble on the 2024 Election (April 10, 2024)
• Frequently Asked Questions: Kalshi’s Attempt to get the CFTC to Unleash Gambling on U.S. Elections via Prediction Markets (March 14, 2024)
• Amicus Brief in KalshiEx LLC v. CFTC (March 4, 2024)
• Statement on Kalshi Lawsuit Against the CFTC’s Ruling (November 1, 2023)
• Statement on CFTC’s Decision to Reject Kalshi’s Proposal (September 22, 2023)
• In a NY Times Article on Kalshi’s proposal, Dennis Kelleher argued “the last thing democracy can withstand now is additional activities that erode the confidence of Americans.” (August 24, 2023)
• Op-ed in the Hill: The stakes are far too high to allow gambling on U.S. elections (July 25, 2023)
• Joint Letter Led by Better Markets Opposing Kalshi’s Proposal (July 24, 2023)
• Comment Letter to the CFTC on Kalshi’s attempt at self certification (July 24, 2023)
• Statement on Kalshi’s attempt to self-certify its own gambling event contracts with the CFTC (June 26, 2023)
• Letter to CFTC with Concerns about Kalshi’s proposal and an upcoming open meeting (June 23, 2023)
• Better Markets Filed a Complaint with the CFTC To Investigate CFTC Commissioner Pham’s Apparent Disclosure Of Highly Confidential Agency Information Involving Kalshi’s Application (December 9, 2022)
• Better Markets initial comment letter to the CFTC on Kalshi’s proposal (September 26, 2022)