If you worry about election integrity — or, at least, about specious claims of rigged elections and the real threat of social unrest — you ought to be scared to death by what a federal judge did on Thursday.
District Judge Jia Cobb in Washington essentially legalized gambling on congressional elections.
The Commodity Futures Trading Commission, the nation’s regulatory agency for derivatives, originally had rejected a bid by a financial exchange startup known as Kalshi to offer everyone from day traders to well-heeled financial companies the chance to throw real money behind legal bets over whether Democrats or Republicans will control the House and Senate after November’s elections.
The commission had reasons to do so. Betting on election outcomes is illegal under federal laws that concern financial markets. But Judge Cobb ruled otherwise.
Within hours, an appeals court put the case on hold pending review. That’s the good news. The bad news is the issue hasn’t gone away completely. Not yet, anyway.
Simply put, this is an idea that deserves to die quickly.
Democratic Sen. Jeff Merkley of Oregon may have said it best. “When we reduce democracy to a horse race for the wealthy to bet on, we cheapen the American experiment by saying money is more important than morals.”
He wrote that in an op-ed for MSNBC last year, after Kalshi first petitioned the commission. It’s a profound thought to consider at a time when so many already are cynical about democracy.
Or maybe it was the reaction of Les Bernal, national director of the advocacy group Stop Predatory Gambling, who told me by phone Friday that he was appalled by “the idea that the future of democracy is going to be all about gambling.”
“Greed is front and center and at the heart of our democracy,” he said.
Already, Bernal said, gambling is the thing most heavily advertised to the American public, especially through sports wagering.
What could possibly go wrong? Plenty.
With people already doubting the fairness of elections, with candidates refusing to concede to landslide defeats, and with election clerks reporting an increase in threats against their safety, the last thing this nation needs is one more reason to doubt an outcome.
I’m not the only one sounding this alarm.
Writing a few months ago for the L.A. Times, Dennis Kelleher and Lisa Gilbert said, “First and foremost, the ability to ‘win’ tens or hundreds of millions of dollars gambling on elections would create powerful new incentives for bad actors to influence voters and manipulate the results to favor their bets.
“Artificial intelligence ‘deepfakes’ and other technological tools for doing so are readily available, increasingly inexpensive and primed for distribution via social media.”
Writing for The Hill, Dennis M. Kelleher of the nonprofit Better Markets said, “It is easy to imagine how AI or social media might be manipulated to quickly circulate false and misleading information … within hours or days of an election that could move enough votes to change the election’s results.”
And all for personal winnings, not the good of the country.
Also, five senators and three representatives wrote to the Commodity Futures Trading Commission last month, warning that “voters already face a political system that allows the richest individuals and corporations to funnel dark money into campaigns without disclosure.”
“The threat of violence and extremism is high,” they said, “and the U.S. remains a target for foreign actors who have sought to meddle in our elections. The last thing that voters heading to the polls need are bets waged on the outcome of that election.”
But, of course, this wasn’t a decision made by the people’s representatives in Congress. It was made by a lone judge in Washington.
Bernal, of Stop Predatory Gambling, said one of his big concerns is that there is no real watchdog for the gambling industry. Who would track illegal election influences tied to gambling interests?
As if to add sirens to the warning lights this ruling ought to be setting off, the United Kingdom was embroiled in a scandal this summer concerning the calling of a special general election. Some members of the conservative party there were suspected of using insider information to bet on the date that election would be called. While police have since called off their investigation, the Betting Commission continues to probe the matter.
Utah and Hawaii are the only two states left that allow no type of gambling. But that might not stop someone outside Utah from wagering on a Utah race or trying to manipulate it. Avoiding gambling’s effects, even in the Beehive State, might not be easy going forward.
Even if the judge’s decision is overturned on appeal, Bernal believes it’s already time to lament what a nation awash in gambling has lost.
“When I was a kid, I used to see TV ads with John Wayne telling us to buy U.S. savings bonds; to invest in our country,” he said. “Now, all we see are ads encouraging people to wager on a con.”
Americans should hope their democracy doesn’t follow that trend.
