The rise of election betting
Marketplace All-in-One
Marketplace
4.5 • 1.4K Ratings
🗓️ 6 November 2024
⏱️ 22 minutes
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Summary
Today we’re talking about a breakout story of this election cycle: the rise of prediction markets and betting on elections. For the first time in a century, Americans can legally place bets on election outcomes using a platform called Kalshi. But the Commodity Futures Trading Commission warns that these markets could warp the public’s understanding of our elections if they’re treated like polls. On this Election Day episode, Cantrell Dumas of Better Markets, a financial reform advocacy group, explains how Americans are dabbling in election betting, the legal questions surrounding these prediction markets, and why he believes manipulation of these markets has the potential to sway elections.
Then, we’ll dig into the history of the “I Voted” sticker and hear a perfect poem for Election Day. Plus, a listener shares what moving abroad taught them about the U.S. voting system.
Here’s everything we talked about today:
- “Election betting is newly legal — and risks getting confused with polls” from NBC News
- “Exclusive: Election betting site Polymarket gives Trump a 67% chance of winning but is rife with fake ‘wash’ trading, researchers say” from Fortune Crypto
- “Cryptoverse: U.S. election speculators play the prediction markets” from Reuters
- “Wall Street regulator moves to ban election betting, escalating fight over new market” from Politico
- “The Case for Legalizing Political Betting” from the Cato Institute
- “How ‘I Voted’ Stickers Became an Election Day Staple” from Business Insider
We want to hear your answer to the Make Me Smart question. Leave us a voicemail at 508-U-B-SMART or email us at makemesmart@marketplace.org.
Transcript
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| 0:00.0 | Hello, everyone, I'm Kimberly Adams. |
| 0:08.8 | Welcome back to Make Me Smart, where none of us is as smart as all of us. |
| 0:12.7 | I'm Kyle Risdahl, today, November 5th Election Day, or more properly, the end of voting day, which makes me sad to have to say that because election day ought to be a thing. |
| 0:22.8 | But that's a whole separate rant that I'm on. Anyway, we're going to talk the rise of prediction markets today and betting on, you know, metaphorically speaking. |
| 0:30.8 | Or actually, I suppose, betting on elections. Yeah. Yeah, yeah. Yeah, we're about to find out. So Americans are betting millions of dollars on the presidential race after a court ruling legalized election betting in the United States just a few weeks ago. You may have heard about platforms like Calci and Polly Market to do just that. But the legality of these prediction markets is still, elements of it are still up in the air. |
| 0:56.7 | And so here to make us smart about what is and isn't legal and what this all means is Cantrell Dumas. |
| 1:02.8 | He's the director of derivatives policy for better markets, a financial reform advocacy group. |
| 1:08.1 | Welcome to the show. |
| 1:09.6 | Hi. Thank you for having me. What are folks really talking |
| 1:13.4 | about when they are talking about election betting? And how is it different maybe from sports |
| 1:20.2 | betting, for example? The election betting that has been on the Kalshi exchange is similar to like a |
| 1:26.6 | VIT contracts. Basically, what it is is that you can place a |
| 1:30.4 | bet yes or no to a particular question. Originally when Kalshi presented this contract to the CFTC |
| 1:36.4 | Commodity Future Trading Commission, it was who is going to control Congress, Democrats or |
| 1:41.1 | Republican. That end of itself is we see it as gaming, gambling, betting, |
| 1:47.2 | wagering on who's going to win a particular election. Since the court case, that has evolved |
| 1:52.1 | to Calshy has been introducing several other contracts as in who's going to win the presidential |
| 1:57.0 | election, who's going to win a popular vote, all these different things people can wager or bet on whether or not this particular candidate are going to win or whether they're going to |
| 2:05.0 | win by certain points. Now, the case is now in the appeal of the actual merits of the case, |
| 2:10.5 | and while the merits are being argued, who knows, within the next year or so, right now, |
| 2:15.5 | as we stand, is legal to bet under Calci. |
| 2:19.6 | Similar to betting on sports, you know, they have a point system or spread, well, whether or not |
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