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Many U.S. states have laws that prohibit wagering on elections, but most consider it a misdemeanor. In two states, Nebraska and Illinois, election betting can be prosecuted as a felony. Despite the legal risks, people have spent more than $3.1 million, on sites like Kalshi and Polymarket betting on the Nebraska Senate race alone.

Interim Executive Director of the Markkula Center for Applied Ethics, Ann Skeet, warns that an expansion of gambling or trading into elections will cause harm with the possibility of insider trading.

Prediction markets “erode the common good,” Skeet said.

“Trust is actually kind of an intangible common good, and our trust in our election processes and our elected officials is one example of something that serves the community as a whole,” she said.

Ann Skeet, interim executive director, quoted by Nebraska Public Media.