Five United States Senators and three House representatives have called for a ban on betting activities linked to the upcoming 2024 presidential election.
The bipartisan group consists of prominent figures such as Senators Jeff Merkley, Richard Blumenthal, Elizabeth Warren, and Representatives Jamie Raskin and John Sarbanes, among others.
In a recent letter addressed to Rostin Behnam, Chair of the Commodity Futures Trading Commission (CFTC), the lawmakers highlighted the perilous influence these betting markets could exert on the electoral landscape.
Betting Platforms Could Swaty Election Outcomes
The group expressed concerns over the possibility of billionaires leveraging large wagers to sway election outcomes, thereby eroding public trust in the democratic process.
The legislators underscored that elections should not be reduced to mere profit-making ventures, as this would fundamentally compromise the integrity of the electoral system.
“Political bets change the motivations behind each vote, replacing political convictions with financial calculations.”
By permitting the commodification of U.S. elections, they argued, the very essence of democracy stands to be undermined.
Last year, @RepRaskin & I warned betting on elections could undermine trust in our democratic institutions & further incentivize dark money in politics. Today, I joined my colleagues in support of @CFTC‘s proposed rule to ban betting on election outcomes. https://t.co/fygd9kLecS
— Rep. John Sarbanes (@RepSarbanes) August 5, 2024
Moreover, the representatives drew attention to the alarming statistics emanating from platforms like Polymarket, where millions of dollars have been wagered on various election-related markets.
The platform’s history of regulatory infractions, including a substantial fine imposed by the CFTC in January 2022, further underscores the urgency of addressing these issues.
The US presidential election is now three months away.
Polymarket Sees Surge in Trading Volume
Launched in 2020, Polymarket operates as a decentralized prediction market platform where users bet on the outcomes of real-world events using cryptocurrencies.
Users engage in betting on various events, such as the results of the upcoming United States presidential election in November 2024.
The platform uses the USDC stablecoin, allowing participants to buy and sell shares in forecasts related to the likelihood of future events.
Additionally, Polymarket offers betting opportunities within the crypto industry, enabling users to predict future prices of cryptocurrencies like Bitcoin.
Polymarket has recently achieved record-breaking trading volumes.
As interest in the US election grows, the platform reached $1 billion in monthly trading volume for the first time, with $343 million recorded in July alone.
This marks a significant increase of over 200% from the $111 million in June and more than 440% compared to $63 million in May 2024.
Despite these impressive trading volumes, Polymarket has struggled to generate sufficient revenue.
The platform has successfully raised $70 million across two funding rounds, including a $45 million Series B round with participation from Ethereum co-founder Vitalik Buterin.
Furthermore, in an effort to streamline the onboarding process, especially for non-crypto users, Polymarket partnered with payments platform MoonPay on July 24, allowing for debit and credit card payments.
“Prediction markets are the purest technological manifestation of liberal democracy,” Yuga Cohler, an engineering lead at cryptocurrency exchange Coinbase, wrote in a recent post on X.
“They take free markets and free speech as inputs and output truth. In an age when centralized control of information is a systemic risk, prediction markets offer a way of cutting through misleading narratives and viewing the unvarnished truth.”
