The Wisconsin Elections Commission (WEC) recently expressed concerns about election trading, generating backlash from two major prediction markets in the United States.
On Tuesday, the WEC released a public notice cautioning registered voters that engaging in “election gambling” via prediction markets might jeopardize their voting rights. The commission warns residents that participating in bets on an election outcome could lead to what it terms "voter qualification administrative challenges" should those voters later try to cast their ballots in the same election.
WEC Administrator Meagan Wolfe emphasized, "We want voters to understand that they cannot legally make a bet on an election and cast a ballot in that same election. We are not able to police someone placing a bet on these platforms, but it’s important for voters to understand the consequences if they bet on an election outcome."
The commission references two Wisconsin statutes concerning voter qualifications, specifically noting that state residents are prohibited from gambling on election results.
According to Wisconsin Statute § 6.03(2), any resident who has a financial interest in a bet or wager on an election cannot vote in that election. Additionally, Wisconsin Statute § 12.13(1)(a) criminalizes voting without proper qualifications as a Class I felony, a measure aimed at combating election fraud.
Data from the Pew Research Center indicates that Wisconsin is among 23 states that have laws banning any form of betting or wagering related to state or federal elections.
As the WEC pushes to clarify its standards on election trading, prediction markets like Polymarket and Kalshi reject the classification of their activities as betting or wagering. This pushback follows a memo issued by WEC staff counsel on July 9, which discusses the implications of election betting and prediction markets.
The memo highlights the Commodity Futures Trading Commission’s (CFTC) federal oversight of registered prediction markets and trading under the Commodity Exchange Act. Yet, it contends that Wisconsin's interpretation of a bet is the basis for its prohibition against election-related gambling.
In Wisconsin, a bet is described as “a bargain where the parties agree that, depending on chance, one stands to win or lose something of value specified in the agreement.” This legal definition underpins the commission's opposition to election trading.
The staff counsel memo notes, "Commission staff believe the prohibition against 'any bet or wager depending upon the result of the election' § 6.03(2) includes making trades on election-related prediction markets. Any bet or wager is all-encompassing language that suggests prediction markets would be included in this prohibition, preventing an elector from voting who has placed a bid on an election-related prediction market."
Kalshi responded strongly against the framing that it offers election betting, asserting instead that it operates a financial exchange platform centered on trading. "Kalshi has hundreds of thousands of users in Wisconsin," a Kalshi representative stated. "Implying they can’t vote because they use Kalshi is not only dishonest, but it is voter suppression! If even a handful of our users in Wisconsin see this and get scared away from voting, that could easily sway an election."
Polymarket, on the other hand, is weighing potential legal action to challenge Wisconsin's attempts to prevent its customers from accessing election markets.
In related news, prediction market issues have previously surfaced in Wisconsin. In May, Governor Tony Evers enacted an executive order addressing insider trading concerns, joining the ranks of Illinois Governor JB Pritzker and California Governor Gavin Newsom, who have also taken steps regarding prediction markets.
This executive order restricts state employees from trading event contracts on these platforms, explicitly prohibiting them from using or sharing any nonpublic information obtained via their government roles for personal gain or to assist others in profiting.
This order references an earlier insider trading incident involving Polymarket and an arrest made in April of U.S. Army soldier Gannon Ken Van Dyke, who allegedly exploited classified information regarding Venezuelan President Nicolás Maduro to gain over $400,000 through trading.
Additionally, last week, similar concerns emerged when Kalshi identified that Donald Trump’s teleprompter operator had made about $100,000 through trades connected to the content of Trump’s speeches.
