WASHINGTON, D.C. — Benjamin Schiffrin, Director of Securities Policy for Better Markets, issued the following statement in connection with Better Markets’ new Fact Sheet, “Sports Betting Scandals Show the Perils of Prediction Markets”:

“Legalized sports betting has led to scandals that call into question the integrity of our nation’s sporting events, and the same thing will happen to our elections if election betting becomes just as widespread as betting on sports. Legalized sports betting has also led to a gambling addiction epidemic in this country, and the spread of sports betting on underregulated prediction markets will only make the problem worse.”

Our new fact sheet discusses the risks inherent in election betting and sports gambling on prediction markets and their regulation by the Commodity Futures Trading Commission (CFTC). Key points include:

• Just as betting scandals have compromised the integrity of professional sports, election betting enabled by prediction markets threatens to compromise the integrity of our democracy. A high-earning, successful MLB pitcher recently jeopardized his career and freedom by manipulating games to profit from a gambling scheme, demonstrating how vulnerable even already well-positioned individuals are to the temptation to compromise their values and careers for financial gain. Candidates and politicians could do the same.
• Prediction markets that offer sports wagers provide the same functional experience as a sportsbook and should be subject to the same rules. Both prediction markets and sportsbooks offer the public the opportunity to win money by wagering on the winner of a sporting event, whether a team will cover the spread, and whether the teams will reach the “over” in terms of total points scored. The public deserves the same protections no matter which platform they engage.
• The CFTC has no business regulating election betting or sports gambling. It has no expertise in either. The CFTC’s mandate is to regulate derivatives contracts with real economic value, such as to hedge against price fluctuations in commodities or financial assets; election betting and sports gambling have no such function.

The fact sheet is available online here.

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.