A U.S. Government Agency Suggests Outlawing Political Betting Platforms
A US government organization is looking to update its rules to ban betting on political events through controversial wagering platforms.
Currently, political betting through legal sportsbooks is illegal everywhere in the US. However, wagering exchanges, which connect buyers and sellers of shares, have found a loophole in federal and state laws.
Officials from the Commodity Futures Trading Commission (CFTC) feel it's time to crack down on these political wagering sites in order to protect the sanctity of US elections.
Recently, the CFTC put forward a proposal to alter its rules and exclude political events and other markets from these wagering exchanges. The updated regulations aim to limit or ban contracts related to "gaming, war, terrorism, assassination," and other activities that are illegal under any federal or state law.
Political Betting Markets
Political betting markets have argued that their contracts provide helpful insights into races and can act as educational resources. Back in 2014, the CFTC gave a "No-Action Relief" letter to a leading political betting exchange, assuring it wouldn't face legal repercussions for allowing US customers to bet on political outcomes.
In August 2022, the CFTC revealed its intention to rescind this concession, resulting in a legal dispute in court. CFTC officials believe they've noticed a surge in political wagering activities since sports betting became legal, thanks to a landmark Supreme Court decision in May 2018.
The CFTC has noticed a rise in the number and range of event contracts offered by exchanges registered with the agency. Additionally, they've received registration applications and expressions of interest from candidates wanting to trade event contracts.
The CFTC's proposed amendment to its event contract policies defines "gaming" for the first time in its 47-year history. If the change is approved, the CFTC will forbid all wagering contracts involving "staking or risking something of value on the outcome of a political contest, an awards contest, or a game in which one or more athletes compete."
"Contracts related to these examples of gaming could not be listed for trading or cleared under the proposal," the statement by the CFTC explains.
Public Reaction
From now until July 9, 2024, the CFTC is accepting public comments regarding the proposed changes to its event contract regulations. All comments will be made public on the CFTC's website after agency review.
Chair of the CFTC, Rostin Behnam (appointed by former President Donald Trump in 2017 and renominated by current President Joe Biden in 2021), insists that banning political event contracts is crucial in order for the agency to concentrate on its original purpose - regulating derivative markets such as futures, swaps, and options.
"Allowing these contracts would push the CFTC, a financial market regulator, into a position well beyond its congressional mandate and expertise," Behnam said. "To put it bluntly, such contracts would put the CFTC in the role of an election police officer."
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Source: www.casino.org
