On Tuesday, the Wisconsin Elections Commission (WEC) published an official press release warning the state’s voters to refrain from casting votes in political races that they have traded on. The statement comes after a formal recommendation put forth by the WEC during its most recent meeting, in which the Commission reached the following conclusion (page 156):
“Commission staff believe that [prediction] market betting on elections is likely to become more prevalent in Wisconsin. With the lack of clarity and legal consensus concerning whether prediction markets qualify as gaming or betting, many Wisconsinites may not understand using prediction markets as betting at all, or that such actions prevent them from voting under Wis. Stat. § 6.03(2) subject to felony-level consequences. Staff recommend that the Commission direct staff to issue a press release that raises awareness about this issue.”
The WEC’s public communication on this issue, posted Tuesday, says that “Wisconsin law is clear: a voter cannot, even indirectly, make a bet or wager on the outcome of an election and then vote in that same election.” According to the WEC, voters could potentially be criminally prosecuted for engaging in the activity that is warned against by the Commission.
Kalshi Head of Enforcement Robert J. DeNault reacted to the WEC’s finding on Tuesday afternoon. “The Wisconsin Elections Commission threatening to prosecute Wisconsin voters and strip away their voting rights for engaging in legal trading activity is unconstitutional and illegal,” said the Kalshi lawyer.
“Election markets certified by the CFTC and available on federally regulated exchanges are legal. Wisconsin hasn’t challenged them. And if Wisconsin believes election markets certified by the CFTC are improper, then it should sue the CFTC — not try to prosecute voters and take away their voting rights. The Wisconsin Elections Commission should retract this guidance before courts are required to force them to do so.”
A Polymarket spokesperson told Wisconsin Public Radio on Tuesday that the prediction market exchange would go “through the appropriate legal process” in addressing the WEC’s public memo to state voters. Although sports event contracts have, to date, represented the highest profile aspect of prediction market legal battles against states, Wisconsin election officials’ stance on election trading promises to garner similar nationwide attention.
Market integrity concerns (and corresponding government enforcement actions) already exist for alleged insider trading activity related to the outcomes of sports contests and global affairs. Prominent sports figures continue to face federal prosecution for their roles in allegedly manipulating the outcomes of specific sportsbook prop bets. Earlier this year, a US Army Special Forces soldier was criminally charged with using classified intel to profit more than $409,000 on Polymarket.
In practice, criminal charges can be brought and prosecutions can be successful against one individual if it can be proven that the specific person unlawfully influenced the outcome of a sportsbook wager or prediction market trade. While it can be argued that an individual’s actual vote-based influence is severely diluted in elections (due to the sheer number of voters who participate), it can conversely be argued that the individual in question does, in fact, have an influence over the outcome that is greater than zero.
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