Sen. Warren and other Democrats press CFTC to 'promptly' finalize banning of political event contracts

Sens. Elizabeth Warren along with other Democratic lawmakers urged U.S. Commodity Futures Trading Commission Chair Rostin Behnam to "promptly" finalize a rule that would ban event contracts that allow bets on political events. 

Election bets "cheapens the sanctity of our democratic process," the lawmakers said in a letter on Monday.

"Political bets change the motivations behind each vote, replacing political convictions with financial calculations," the lawmakers said in the letter. "Allowing billionaires to wager extraordinary bets while simultaneously contributing to a specific candidate or party, and political insiders to bet on elections using non-public information, will further degrade public trust in the electoral process."

"We urge you to promptly finalize and implement this rule to prevent the commodification of U.S. elections," they added. Sens. Warren, Jeffrey Merkley of Oregon, Sheldon Whitehouse of Rhode Island, Chris Van Hollen of Maryland, Richard Blumenthal of Connecticut and Reps. Jamie Raskin of Maryland, John P. Sarbanes of Maryland and Eleanor Holmes Norton of Washington D.C. all signed the letter.

The CFTC voted in May to propose a rule that, if finalized, would ban event contracts that bet on political contests and other areas such as those involving gaming, war, terrorism and assassination. These contracts would not be allowed to be listed for trading or accepted for clearing through a CFTC-registered entity. 

Event markets, such as Kalshi and Polymarket, allow users to bet on the outcome of future events, including on the upcoming U.S. elections. Behnam said there has been a "significant uptick" in event contracts listed for trading on exchanges registered with the CFTC since 2021. 

“As we approach the 2024 election, voters already face a political system that allows the richest individuals and corporations to funnel dark money into campaigns without disclosure,” the lawmakers said in the letter. “The threat of violence and extremism is high, and the U.S. remains a target for foreign actors who have sought to meddle in our elections. The last thing that voters heading to the polls need are bets waged on the outcome of that election.”

The CFTC also doesn't have the congressional mandate to regulate election and campaign activity, the lawmakers said on Monday. 

Behnam has previously said that allowing contracts involving political events would push the CFTC beyond its Congressional mandate and expertise.