By Norah ODonnell
The 2024 United States presidential elections are coming up with each candidate campaigning to form the next administration. On that note, five United States Senators and three House representatives have called for a total ban on betting activities connected to the forthcoming election.
The bipartisan group features prominent figures like Senators Jeff Merkley, Elizabeth Warren, Richard Blumenthal, and Representatives John Sarbanes and Jamie Raskin, among others.
In a recent letter sent to Rostin Behnam, Chair of the Commodity Futures Trading Commission (CFTC), the legislators mentioned the dangerous influence these betting markets might exert on the electoral landscape.
Betting Platforms May Affect Election Results
The group of lawmakers expressed their worries over the likelihood of billionaires leveraging huge wagers to sway election results, hence eroding public trust in this democratic process. On that note, the lawmakers highlighted that elections should never be reduced to mere profit-making ventures, since that would fundamentally compromise the integrity of the entire electoral system.
“Political bets change the motivations behind each vote, replacing political convictions with financial calculations.”
By allowing the commodification of US elections, they insisted, the very essence of democracy stands to be undermined.
Additionally, the lawmakers drew attention to the alarming statistics arising from platforms like Polymarket, where millions of dollars have already been wagered on different election-related markets.
This platform’s history of regulatory infractions, including a huge fine imposed by the CFTC in January 2022, also highlights the urgency of addressing these challenges. In that context, the US presidential election is now around three months away.
Polymarket Records Increased Trading Volume
Introduced in 2020, Polymarket works as a decentralized forecast market platform where users bet on the outcomes of real-world events using cryptos.
Often, users bet on different events, including the results of the forthcoming US presidential election in November 2024. Interestingly, the platform uses the USDC stablecoin, letting participants sell and buy shares in predictions related to the possible occurrence of future events.
Moreover, Polymarket offers betting opportunities in the crypto space, allowing users to forecast future prices of cryptos like Ether and Bitcoin.
Recently, Polymarket hit record-breaking trading volumes as more users engaged in its services.
As interest in the United States election intensifies, the platform hit $1 billion in monthly trading volume for the first time, with around $343 million recorded in July 2024.
That marks a considerable surge of at least 200% from the $111 million in June and over 440% compared to $63 million in May 2024. Despite all these remarkable trading volumes, Polymarket has struggled to generate adequate revenue to support its operations and make profits.
On that note, the platform successfully raised $70 million across two funding rounds, including a $45 million Series B round with the notable participation of Ethereum co-founder Vitalik Buterin.
Additionally, in a notable effort to streamline the onboarding process, mostly for non-crypto users, Polymarket collaborated with payments platform MoonPay on July 24, helping support debit and credit card payments.
An engineering lead at Coinbase crypto exchange, Yuga Cohler, wrote in a recent post on X:
“Prediction markets are the purest technological manifestation of liberal democracy. “They take free markets and free speech as inputs and output truth. In an age when centralized control of information is a systemic risk, prediction markets offer a way of cutting through misleading narratives and viewing the unvarnished truth.”
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