Prediction markets in Idaho face scrutiny over election-related bets and potential manipulation

Online prediction markets are coming under fresh scrutiny in Idaho amid rising bets on unresolved races and candidates not on the ballot, raising concerns over manipulation and election interference as regulators debate oversight.

Prediction markets are drawing fresh scrutiny in Idaho after online wagers began piling up on races that have not yet been decided, and in one case on a political candidate who is not even on the ballot. The bets, placed on platforms such as Polymarket and Kalshi, sit in a grey area between financial trading and gambling, raising questions about manipulation, election integrity and whether ordinary state gambling rules can keep up with fast-moving digital markets.

Jonathan Krutz, a Boise State University professor emeritus and chair of the anti-gambling group Stop Predatory Gambling, said the danger lies in the fact that these contracts are tied to real-world events that can be influenced. He argues that if money can be made from a candidate’s defeat, then there is an incentive to spread disinformation, encourage a withdrawal or otherwise interfere with a campaign. In his view, the markets are particularly vulnerable because they are presented to users as neutral trading systems even though the underlying events can be shaped by bad actors.

The biggest Idaho political market on Polymarket is the Democratic primary for governor, where trading has reportedly reached about $80,000. The front-runner in that market is Terri Pickens, but the second-largest volume is attached to Stephen Heidt, who won the party’s nomination in 2022 but did not file to run this year and is not on the ballot. Idaho Democratic Party officials, alerted to the activity, have since adopted a policy barring staff members from betting on elections, according to spokesperson Avery Roberts.

The attention comes as prediction markets face wider crackdowns elsewhere. Kalshi recently fined and suspended three congressional candidates after they placed wagers on their own races, and federal prosecutors also brought an indictment against a U.S. Army soldier accused of profiting from a Polymarket bet linked to a military operation. According to AP and Axios, one of the suspended candidates, Minnesota state senator Matt Klein, acknowledged making a small bet on his own primary race and said it was a mistake.

State officials in Idaho say they are aware of the platforms but are leaving questions of enforcement to the attorney general. Attorney General Raúl Labrador has already joined a multi-state legal challenge to federal efforts he says could weaken state authority over gambling rules. Krutz says the broader issue is that prediction markets have expanded far beyond the narrow academic and commercial uses that once defined futures trading, and that without meaningful oversight they create opportunities for corruption and addiction that regulators are not yet equipped to police.

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Source: Noah Wire Services