The Wisconsin Elections Commission has recently issued an advisory warning voters that betting on elections could lead to ballot disqualification or even prosecution. This advisory has sparked a heated debate, with prediction market company Kalshi criticizing the law as voter suppression.
Ann Jacobs, a commissioner with the Wisconsin Elections Commission, found herself at the center of this controversy when she received a flood of social media posts from Kalshi employees and supporters. The advisory was simply a reminder of a Wisconsin election law originally passed in 1849 which prohibits betting on an election in which one is voting.
Kalshi’s Response and the Legal Battle
Kalshi, a leading prediction market company, has criticized the law, calling it bananas, illegal, and a type of voter suppression. The company argues that states like Wisconsin trying to prevent election betting are engaged in voter suppression as some voters who place wagers on a race might also be motivated to vote.
Nearly half the states, including Wisconsin, are locked in legal battles with Kalshi over who should regulate prediction markets. States insist the companies are no different than gambling operators and should be subject to state gaming laws, whereas Kalshi and the Trump administration say the federal government should oversee prediction markets as a financial product known as a swap.
Election Integrity Concerns
Election expert Matt Barreto, director of the UCLA Voting Rights Project, has raised concerns about the potential for election integrity issues. He argues that foreign actors or partisan interests could use prediction markets to make a candidate appear more popular than they are in an effort to influence turnout.
There’s also the potential for insider trading something that has dogged the prediction market industry. Kalshi has said it blocked dozens of political campaign staffers who have tried to bet on their own candidates since May. Barreto warns that if election officials or campaign staffers are involved in betting, it could tarnish the sanctity of the election process, similar to the Pete Rose baseball scandal.
Charles Stewart, who runs MIT’s Election Data and Science Lab, acknowledges that most states have vote-counting checks that would prevent such manipulation. However, he notes that the hypothetical could become part of already heated political discourse.
The Future of Election Betting
Despite the controversy, prediction markets continue to gain popularity. Kalshi recently launched a midterm election dashboard to allow traders to monitor and place money on dozens of races at once. The company argues that election betting will engage people who might not have cared otherwise about politics.
However, Barreto is skeptical of this argument. He suggests that if Kalshi sincerely cared about voter suppression, they would use some of their profits to set up a charity to mobilize the vote. As the legal battles and debates continue, the future of election betting remains uncertain.
