Ann Jacobs is a commissioner with the Wisconsin Elections Commission, a quiet, low-profile state agency that oversees elections. Recently, though, her day was anything but quiet.
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“I was sitting at my desk and all of a sudden Twitter was showing a lot of alerts,” said Jacobs, who watched a flood of posts inundate her screen from employees, lawyers and other boosters of the prediction market company Kalshi.
“My reaction was, boy howdy are they mad,” Jacobs said.
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The outrage took Jacobs aback because of what set off the attacks: a commission advisory informing voters that they cannot place a bet in an election in which they cast a ballot.
Wagering on such a race could disqualify a ballot, or even result in a referral to state prosecutors, according to the commission’s statement.
This is not a new policy. The advisory was simply stating the basics of a Wisconsin election law originally passed in 1849, Jacobs said.
“You can’t be a felon on active supervision and vote. If you’re 17, you can’t vote, and betting on an election where you vote, it’s the same thing, it’s not allowed,” she said.
Jump ahead to 2026, and Kalshi, the company leading the prediction market craze, is criticizing the law, calling it “bananas,” “illegal” and a type of “voter suppression.”
Watching employees of the multi-billion-dollar company whip up a social media frenzy against an antebellum Wisconsin law left Jacobs puzzled.
To her, pointing out election law months before an election was “simply responsible work by a government entity.”
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The commission was spurred to issue the warning as prediction markets have become increasingly mainstream and a more prominent part of political discussions.
“We want people voting for the person they think will do the best job at the position they are being elected to. We don’t want people voting for someone who isn’t the best person for the job simply because it is going to line a voter’s pocket,” Jacobs said.
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Billions of dollars are traded every week on prediction market sites Kalshi and Polymarket.
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Nearly half the states, including Wisconsin, are locked in legal battles with Kalshi over who should regulate prediction markets. States insist the companies are no different than gambling operators and should be subject to state gaming laws, whereas Kalshi and the Trump administration say the federal government should oversee prediction markets as a financial product known as “a swap.”
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As the legal fights bang on, the bets keep pouring in.
Big sporting events, like the NBA finals and the World Cup, saw tens of billions of dollars wagered. The companies expect the midterm elections to be another massive event.
Yet that vision conflicts with another reality: election betting is illegal in some or all circumstances in 32 states, according to the National Conference of State Legislatures.
“There should be absolutely no money involved in the outcome of our democracy. We should be voting on candidates for their positions and policies to represent us, not because we can make a buck,” said Matt Barreto, director of the UCLA Voting Rights Project.
Election betting presents numerous possible election integrity issues, he said.
Foreign actors or partisan interests could use prediction markets to make a candidate appear more popular than they are in an effort to influence turnout.
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Then there’s the potential for insider trading, something that has dogged the prediction market industry, where everyone from President Trump’s teleprompter operator to a special forces soldier has been accused of trading with confidential information. Kalshi has said it blocked “dozens” of political campaign staffers who have tried to bet on their own candidates since May.
Imagine, Barreto said, how this could play out during the midterms.
Say a poll worker places a bet on one candidate, and in order to make money, the person slows down the vote count or does an intentional undercount to change the real election result.
“If we found people who were somehow connected to either political campaigns or to the administration of elections, in the secretary of state’s office or county elections office, were somehow involved in this, in the same way that Pete Rose tarnished the sanctity of baseball,” said Barreto, referring to the baseball legend who was banned from the sport in 1989 in a betting scandal.
Charles Stewart, who runs MIT’s Election Data and Science Lab, said most states have vote-counting checks that would prevent such manipulation from happening, but it is a hypothetical that could become part of already heated political discourse.
“If you are looking for a reason to be skeptical about election results, election officials trying to manipulate them for financial gain becomes another straw to grasp at,” Stewart said. ” However, these people don’t need prediction markets to concoct some conspiracy theory to explain away why their candidate lost.”
Kalshi declined to comment.
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The company has argued that election betting will engage people who might not have cared otherwise about politics. The company argues states like Wisconsin trying to prevent election betting are engaged in “voter suppression,” because some voters who place wagers on a race might also be motivated to vote in the election — when they otherwise might not go to the polls.
Barreto does not buy that argument.
“If they sincerely cared about voter suppression, they would use some of their profits to set up a charity to mobilize the vote,” he said.
Kalshi is not backing turn-out-the-vote efforts.
The company did recently launch something else: a midterm election dashboard to allow traders to monitor and place money on dozens of races at once.
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