New York Congressman Ritchie Torres has expressed his support for regulating election betting contracts rather than attempting to ban them outright. In a recent letter to the chairman of the U.S. Commodity Futures Trading Commission (CFTC), Rostin Behnam, Torres emphasized the importance of creating a regulatory framework to prevent bad actors from exploiting these markets.
In his letter, Torres argued that the CFTC should prioritize developing a plan to regulate election betting markets. He stated, “I would ask that the Commission consider working toward a plan for regulating these markets, rather than preventing them from existing in regulated markets.” He believes that a well-regulated environment would better serve the integrity of elections and protect consumers.
Torres highlighted that the CFTC’s efforts to ban election betting contracts through legal challenges could inadvertently cause broader harm by delaying essential regulations aimed at ensuring election integrity. He warned, “Delays could allow illegal and unregulated markets to continue gaining market share.”
Torres expressed his willingness to collaborate with the CFTC to address concerns and provide necessary resources for effective regulation. “I am more than happy to work with the CFTC to provide the resources needed and to address any concerns together,” he stated.
He suggested that the CFTC could enhance election integrity by working alongside regulated entities rather than pushing for outright bans, which may lead to the proliferation of unregulated markets.
Cameron Winklevoss, co-founder of Gemini, echoed Torres’s sentiments, advocating against the prohibition of event contracts on decentralized prediction markets. He noted that such markets require participants to have “skin in the game,” making them potentially more reliable than traditional polls or expert opinions.
The CFTC has recently faced legal challenges regarding its authority to regulate election betting markets. On September 12, a U.S. District Court judge ruled that the CFTC had “exceeded its statutory authority” in halting Kalshi’s election markets. The CFTC has argued that betting on U.S. political races could disrupt markets and threaten election integrity.
As the debate over the regulation of election betting contracts continues, Torres’s call for a balanced approach highlights the complexities of integrating innovative financial products into existing regulatory frameworks while safeguarding the democratic process.
