A reversal of empathy occurs when violence leads to economic gain.
When someone bets on a military attack, they desire it for economic reasons, even if they do not consciously approve of it.
More than half of U.S. states have taken steps to water down markets that allow citizens to bet on election results, according to a new analysis from Pew Research.
A Pew review of data from the National Conference of State Legislatures in June found that lawmakers are increasingly trying to regulate “prediction markets” — platforms that allow people to buy and sell “contracts” based on predicted outcomes of future events, from sports matches to the outcome of wars.
Prediction market platforms such as Kalshi and Polymarket have exploded in popularity across the United States in recent years, attracting the attention of economists, public investors, legislators, and more. Proponents say it’s a new way for people to direct their money without relying on “households” or self-interested “experts” for probabilities and opinions. In a series of lawsuits, critics raised concerns about the risks, lack of regulation and the behavioral impact of betting on real-world events. Chief among these concerns is election gambling, which will be newly legalized federally in 2024. Previously, the U.S. Commodity Futures Trading Commission (CFTC) had rejected requests to open elections to gambling.
Since then, the majority of U.S. states have taken some action to regulate the practice, according to a Pew analysis. Here’s what you need to know about you.
States where election gambling is prohibited
According to a Pew analysis, nearly half of all U.S. states have outright bans on election gambling, and nine more have some kind of law that bans or restricts election gambling under certain circumstances.
Only 18 states and D.C. do not have specific election gambling laws, but some states have broader regulations that may apply. For example, Idaho already has an 1887 law that makes election gambling a misdemeanor.
States with situational regulations, such as Oregon and South Dakota, have rules about who can participate. For example, candidates running for public office are prohibited from betting on their own elections. Other states differentiate between felonies and misdemeanors based on factors such as the amount of money involved.
States with full-scale prohibition handle deterrence and penalties in different ways. Iowa, Massachusetts, Pennsylvania, and Rhode Island penalize people who conduct or conduct election gambling operations, but not those who participate. Meanwhile, in Delaware and New York, those convicted of participating in election gambling can be stripped of their right to vote.
Most states that have outlawed prediction markets make violating the law a misdemeanor, but some, including Illinois, Nebraska, and Minnesota, can charge it as a felony.
Countries proposing legislation on prediction markets
Lawmakers are proposing a variety of bills to regulate prediction markets, from outright bans on services like Polymarket to imposing age restrictions and taxes on the platforms, in a bid to address the burgeoning market.
Some attempts to regulate markets at the state level are complicated by the federal government’s position that prediction markets are subject to federal regulation and exempt from state gaming laws because people trade or “exchange” financial instruments rather than place bets or wagers.
The CFTC has sued several states to prevent regulation of prediction markets.
In May, Minnesota became the first state to completely ban Kalshi, Polymarket, and similar platforms, with a few exceptions (trading based on weather forecasts, anyone?), making it a felony to create, operate, manage, promote, advertise, or market a prediction market. The CFTC filed a lawsuit seeking an injunction to enact the law, calling it a “blatant and unprecedented violation of the Commission’s exclusive regulatory domain.”
