Democrats have set their sights on prediction market platforms Kalshi and Polymarket after President Donald Trump’s administration embraced them.
asserted
administration → set → them
Under the Trump administration, Commodity Futures Trading Commission (CFTC) Chairman Michael Selig has taken steps to loosen the rules on prediction market platforms and allow wagers on elections and sports.
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Selig → take → elections
The CFTC has also asserted that it has the exclusive federal authority to regulate the platforms, superseding state laws that restrict gambling.
asserted
that → assert → gambling
In May, Trump said that prediction markets would “thrive” under his presidency, and described the CFTC’s intervention as the “Gold Standard” to block state-level regulations.
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markets → say → regulations
(RELATED: Unholy Alliance Between Gambling And News Industries Grows Deeper)
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Alliance → grow → Gambling
Now that Democrats are back in power, some members of both the House and Senate want to crack down.
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members → want → House
“Folks are rightfully concerned about dangerous bets on elections, war, assassinations, terrorism, and government actions that go against the public interest,” Democratic Oregon Sen. Jeff Merkley told Politico.
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Merkley → concern → Politico
“We need to rein in this gambling, and with Democrats taking back control of Congress, now is the time for long-overdue legislative action.”
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time → need → action
Prediction market critics argue that there is virtually no distinction between Kalshi or Polymarket and traditional online gambling platforms, and therefore should be regulated more strictly.
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critics → argue → Kalshi
They also point to ethical gray areas, such as the growing number of partnerships between the platforms and news organizations, and the potential for abuse and insider trading, such as the case when a U.S. special forces soldier who participated in the Nicolás Maduro raid allegedly used classified information to bet on the Venezuelan leader’s ouster.
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who → point → ouster
Defenders say that the platforms are akin to markets, with users “trading” against each other as opposed to wagering against a casino or bookmaker.
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users → say → casino
In October, Kalshi’s CEO Tarek Mansour argued in a Wall Street Journal op-ed that betting money on the Milwaukee Brewers was not gambling because users are participating in a “market.”
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users → argue → market
Whereas sportsbooks and casinos set odds and bet against gamblers, Kalshi allows users to trade contracts, and then Kalshi takes a fee.
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Kalshi → set → fee
(RELATED: Kalshi CEO Insists Having Money Riding On Brewers To Win Is Not Gambling)
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Having → insist → Brewers
Democratic Rep. Maxine Waters said Nov. 6 she intends to curb “predatory lending and predatory platforms, including prediction markets, so that our constituents keep more of their hard-earned dollars in their pockets,” according to Politico.
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constituents → say → Politico
Waters is campaigning for chair of the House Financial Services Committee, which has legislative and investigative oversight over federal regulators, such as the CFTC.
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which → campaign → CFTC
In another sign of a future crackdown, Democratic Massachusetts Sen. Elizabeth Warren and Republican Utah Sen. John Curtis wrote in a letter to Mansour and Polymarket’s CEO, Shayne Coplan, that they were “particularly troubled by election-related event contracts” in the lead-up to the midterm elections.
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they → write → elections
“Event contracts tied to elections receive prominent coverage and are treated by some observers as indicators of political momentum.
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contracts → tie → momentum
As such, they have become part of election-related news coverage that reaches potential voters, raising questions about how the reporting of prediction market odds may shape public perceptions of electoral races,” they wrote.
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they → become → races
In addition to Curtis, Republican Reps. Blake Moore of Utah and Adrian Smith of Nebraska have introduced federal bills that would increase oversight over the growing industry.
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that → introduce → industry
Republican Sen. Ted Cruz has reportedly planned legislation that would block prediction market platforms from offering sports contracts unless they get approval from a state or tribal government.
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they → plan → government
The Aporia
