Should Commodities Traders Be Able to Gamble on Who Wins Control of Congress?

The American Democracy Minute Radio Report & Podcast for Aug 11, 2023



Today’s Script

(Variations occur with audio due to editing for time. Today’s Links below the script)

You’re listening to the American Democracy Minute, keeping YOUR government by and for the people.

Should investors be able to bet on who wins the control of Congress?  A commodities trading company wants to sell “futures” contracts based on the outcome of elections.

You may have heard of “futures trading” on commodity markets, where traders buy contracts now for say, wheat, for a crop which won’t be delivered until next year.  Such contracts protect food manufacturers against price fluctuations due to weather or geopolitical events.  Traders use it to make a quick buck.  But what does this have to do with Democracy?

The federal Commodity Futures Trading Commission is reviewing an application by KalshiEX LLC which would allow traders to buy a futures contract on which party will win control of Congress.  Financial protection, perhaps, if you are a manufacturer of red hats.  But also a temptation for bad actors to try to influence the outcome of an election in the final days – just to make money.  

Writing in The Hill, Dennis M. Kelleher, the president and CEO of Better Markets, suggests that allowing such contracts amounts to gambling on our Democracy:

“If Jan. 6  taught us anything, it is that democratic institutions and practices like elections are precarious and need to be defended and protected.  Profit- maximizing companies should not be allowed to undermine those elections and endanger our democracy.”   

We have links to the proposal, the CFTC’s comment form, and the Kelleher op-ed at AmericanDemocracyMinute.org. I’m Brian Beihl

Today’s Links

Articles & Resources:
Commodity Futures Trading Commission – CFTC Announces Review of Kalshi Congressional Control Contracts and Public Comment Period  (The official public comment period ended in July, though you can still write the CFTC with your comments
Commodity Futures Trading Commission – Comments form page
KalshiEX LLC – Letter to CFTC
CFTC –  Questions for Public Comment
Senate Oversight Committee for CFTC – Senate Committee for Agriculture, Nutrition & Forestry
The Hill – (Opinion by DENNIS M. KELLEHER) The stakes are far too high to allow gambling on U.S. elections
Groups Taking Action:
Better Markets, Public Citizen


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