Senators ban themselves from prediction markets after candidates bet on own races
- Thread starter JournalBot
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Just distracting from the fact they do the same thing with their brokerage accounts, using inside information.
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It took some digging because Congress.gov doesn't have the text of the bill yet.
But here's the testimony....which edits Rule XXXVII Conflicts of Interest.
https://www.congress.gov/congressional-record/volume-172/issue-76/senate-section/article/S2151-1
https://www.rules.senate.gov/rules-of-the-senate
And nowhere do see anything about penalties other than maybe a nastigram. It is a "rule" that can be ignored by whomever happens to be the majority in power ruling the committees.
But here's the testimony....which edits Rule XXXVII Conflicts of Interest.
https://www.congress.gov/congressional-record/volume-172/issue-76/senate-section/article/S2151-1
https://www.rules.senate.gov/rules-of-the-senate
And nowhere do see anything about penalties other than maybe a nastigram. It is a "rule" that can be ignored by whomever happens to be the majority in power ruling the committees.
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Do individual stock holdings next.
Honestly, even index fund holdings can encourage juicing stock markets overall (e.g. cutting corporate tax rates, announcing/cancelling tariffs.)
Honestly, even index fund holdings can encourage juicing stock markets overall (e.g. cutting corporate tax rates, announcing/cancelling tariffs.)
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Lol, sure, and what about the offspring of politicians who are advising the company? Do you honestly think Kalshi is telling Don Jr., no bets for you?
These prediction markets are nothing more than gambling rackets rife with insider trading and knowledge and should be banned outright. It's one thing to bet on something like sports where the outcome is uncertain, quite another to bet on "Are we going to bomb Iran tonight?"
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I came into the comments to write something like what you wrote.
Even far away in Europe, we know what a fantastic trader Nancy Pelosi is...
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Thing that is funny...is there is a minority of people in Congress that greatly outdo the market average--and then there's everyone else. At least if you stick to what we can find out from official disclosures (relevant bit is about 9 minutes in)
View: https://www.youtube.com/watch?v=qWONlYziwmc
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Yes, you could collude with your opponent so you both make a killing. There's no way to outright prevent these people from still making proxy bets. They'll still be illegal bets though.
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Without wanting to dive into the minute ethics (you raise an interesting point, and while I believe it is corrupt, I'm not sure it really is harmful to the public in your limited test case), consider spread. Say you're running as an incumbent in a safe district. That's true for lots of politicians every year.
If you already know you're going to win, and you have $1M in your campaign treasury, and you can spend it or not -- you have a pretty solid insider's understanding of how spending that cash will move the final numbers. One fairly obvious way to launder that money out of your protected campaign account and into your personal bank account is goosing your victory spread (or not) and betting that inside knowledge. In fact you could even narrow the margin of victory at the last moment by releasing negatives that only you know about, while taking very little risk and scooping pretty solid dollars.
That's just off the top of my head. I bet there are a lot of corrupt ways to deploy insider information and decisionmaking to create scenarios where the apparent risk (and thus the odds of a bet) are way off.
I continue to believe we should either ban prediction markets entirely (as illegal gambling forums) or leave them totally unregulated. It's just a morass we don't need to spend government money on, particularly during an era where the national debt is comparable to GDP.
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Yeah, the real sense of panic on the Hill has got to be that now that the optics are so terrible, their real sources of personal income are in danger. Boo hoo!
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You have non-public information about your odds. In itself, that should not be allowed.
Banning just the candidate is silly; there's a lot of other people with non-public information about the race, such as all the campaign staff and volunteers, their families and friends, polling agency staff members (until they publish the poll), etc.
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No one involved in any level of Government should be allowed to participate in speculative investments. I don't care if you are the President, a low level clerk, or an enlisted member of the armed forces. If you have or even could be perceived to have any influence or insider knowledge it should be illegal for you to gamble or play the market like this.
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They're Senators they are already rich. Why do they need to be more rich.
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Jr. isn't a politician, obviously. There's always a loophole.
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Because they can be. You'll never get rich with the attitude that "enough" is an amount that exists.
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"Serving in Congress should never be about finding new ways to profit; it should be about delivering results for the American people.”
I almost spit my coffee all over my computer..........and he can say this with a straight face?
I almost spit my coffee all over my computer..........and he can say this with a straight face?
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lolwat?
I guarantee you, campaigns have lots of insider information that they do not share with the public.
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"The US won a court ruling that prevents New Jersey from enforcing laws"
I don't think the US has won anything since Trump was elected.
86 47
I don't think the US has won anything since Trump was elected.
86 47
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This is good, but they need to do the same for representatives, judges, and pretty much anyone in a decision making capacity in government.
Notably, they ONLY did this when they were caught betting on their own campaign results, which is a threat to the parties maintaining power if people run just to throw a race and cash in. Notably, they aren't being blocked from trading and holding stock options. That should be a requirement straight out. Divest ALL corporate interests completely. You know, like the president does... did... did publicly...
And NOT to family members! Holy hell!
Notably, they ONLY did this when they were caught betting on their own campaign results, which is a threat to the parties maintaining power if people run just to throw a race and cash in. Notably, they aren't being blocked from trading and holding stock options. That should be a requirement straight out. Divest ALL corporate interests completely. You know, like the president does... did... did publicly...
And NOT to family members! Holy hell!
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Not as much as you'd think these days. The day-trading was found out by the public, and they refused to do anything about it. I think this has more to do with the very specific thing they were gambling ON, which was their own race results. They saw it as a potential danger to their OWN party control, and wanted to nip that in the bud.
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I'd be fine if we paid members of Congress a million dollars a year each...if they agreed that they and their spouse had no other income for the duration. All investments should be put into a blind trust. Partners at accounting firms have stricter requirements than Congress or the Supreme Court or the President. If they want to be public servants, they must serve.
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That uncertain outcome from sporting events? May not be as uncertain as you might wish. Prediction markets are only going to drive more and more and more corruption in sports.
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Though everything else mentioned is clear cut insider trading, using non public knowledge to make a truck load of money, this does not apply to politicians (or athletes) betting on their own races/games. But I understand why it should be illegal.
It is not insider knowledge for a politician or athlete betting they would win, and ending up winning, since they cannot unilaterally flip a magical switch and win. Athletes require skill, would-be politicians need to be majority elected, and both compete against other candidates.
But self-betting provides incentive to throw matches or, for politician candidates, to sabotage their campaign. Losing, unlike winning, can be exclusively decided by a single party. So since it would be super weird, legally questionable, and probably untestable and unenforceable, to let athletes & politicians self-bet but only that they would win, outlawing self-betting makes a lot of sense.
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To believe this you need to imagine:
Politicians don't know how many volunteers they can mobilize, they don't know how many donations they've raised, they don't know how their voter outreach efforts are going, they haven't commissioned a private poll, they don't know they have oppo research they're going to leak to the press in an October surprise, they don't know that the press just reached out to them regarding a scandal they're about to publish.
Athletes don't know their health issues, they don't know their teammates' health issues... I imagine there's plenty of other things they could know, but I'm not in that space.
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You can thank SCOTUS for opening up legal gambling the way they did. It's going to be a free-for-all from here on out.
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Self-betting is disallowed because if it was okay people could bet against themselves (alone or as a part of a scheme with others), lose deliberately and make 100% guaranteed money - a crapload of it, in fact, if they were the most popular candidate. That option and ability to throw the match or race is the only "insider" part, unlike conventional insider trading.
No matter what "insider information" politicians (or athletes) have, a win is never fully guaranteed. But even if it was 99% guaranteed, much of that insider information should agree with external polls. So if the politician was considered the most favorite to win, and ended up winning, they'd make peanuts from self-betting if they bet they'd win, since most bets would be in their favor.
Put another way, you can only throw a match/race by losing. Throwing it by winning is not a thing*. But since self-betting cannot be restricted to wins only, it is disallowed.
*On second thought it could be, for both athletes and politicians, but the scheme would need to be far more complex, time-consuming and elaborate: Instead of being the overwhelming favorite to win, and losing on purpose, a candidate would need to be the least expected to win, an underdog.
An athlete would have needed to spend years deliberately underperforming in public, while performing great in private. Similarly, a lukewarm candidate politician would need to have kept a low profile for quite a while, then pulling a political ace card when it mattered and/or successfully attacking with smear campaigns or scandals their opponents. Far more difficult, with still not a 100% guaranteed win, but not impossible. So either way self-betting should not be a thing.
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Ironically, the party of bible-thumping moral values...dumped this mess on all of us.
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As mentioned elsewhere (this thread or the other prediction market thread) since you can just give money to people, if betting on yourself to win was legal, you could just give money to players on the other team to throw the game.
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