Political Prediction Market Bans Violate First Amendment, Analysis Says as Congress Eyes Election Trading Crackdown
Updated
Updated · Bloomberg Law · Aug 21
Political Prediction Market Bans Violate First Amendment, Analysis Says as Congress Eyes Election Trading Crackdown
2 articles · Updated · Bloomberg Law · Aug 21
Summary
Political prediction markets likely cannot be banned outright because election-related contracts function as protected political expression, according to a Bloomberg Law analysis.
Three First Amendment interests are implicated: traders express views by risking money, platforms publish price-based political forecasts, and the public has a right to receive that information.
The analysis argues regulators may police manipulation, insider trading, consumer harm and some foreign participation, but cannot single out election contracts for prohibition while allowing similar trades on other topics.
Minnesota already passed a state ban that the federal government halted before it took effect, and lawmakers including Sen. Jeff Merkley and Rep. Jamie Raskin have proposed a nationwide STOP Corrupt Bets Act.