In July 2010, US Senator Blanche Lincoln (D-Ark.) predicted the rise of prediction markets and the problems they could cause. If not properly regulated, Lincoln warned during Senate proceedings on the Dodd–Frank Wall Street Reform and Consumer Protection Act, prediction markets could evade gambling laws by offering “event contracts” that let people place wagers on sports games. Rather, they would be used solely for gambling.” Today, Lincoln is a lobbyist for prediction market Kalshi and has urged the Commodity Futures Trading Commission (CFTC) to allow sports gambling on the markets.
The firm she founded has received $480,000 from Kalshi since 2024 in exchange for lobbying Congress and the CFTC for looser regulation of event contracts. But in 2010, Lincoln wrote a law that let the US ban sports gambling on prediction markets. Lincoln was chair of the Senate Agriculture Committee and a primary author of Title VII of the Dodd–Frank Act, which gave the CFTC regulatory authority over swaps.
Lincoln made it clear that the law’s purpose was to prevent trading that would be harmful to the public and that the law defined “public interest” broadly to give the CFTC authority to ban sports bets offered in the form of event contracts. Lincoln seemed to expect this approach to result in a ban on sports bets and other kinds of gambling, saying during Senate proceedings that the CFTC needs the authority to prohibit and should prohibit event contracts that exist primarily to enable gambling. But Congress left the ultimate decision up to the executive branch instead of banning these types of event contracts directly.
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