Wisconsin's election commission reminded voters that betting on elections, including through prediction markets, is illegal under a 175-year-old law, with violators losing their voting rights. This has sparked backlash from platforms like Kalshi, which argues the law is unconstitutional.
Currently, 23 states have similar laws, but interpretations vary on whether these apply to prediction market trades. For instance, Colorado explicitly prohibits election betting, while New York has not clarified its stance. Legal experts suggest that states may have a stronger argument for regulating election-related betting due to their constitutional authority over elections.
A recent federal appeals court ruling allows event contract platforms to feature election offerings, but the Commodity Futures Trading Commission (CFTC) maintains that these contracts are swaps, thus under federal jurisdiction.
As states and prediction market platforms navigate this legal uncertainty, the outcome could significantly impact the future of election betting and the operations of these platforms