A federal appeals court has ruled that Kalshi, a prediction market platform, can proceed with listing contracts for election betting. The ruling issued on Wednesday by Judge Patricia Millett of the U.S. Court of Appeals for the District of Columbia Circuit stated that the U.S. Commodity Futures Trading Commission (CFTC) did not demonstrate that the public would face irreparable harm without a stay pending appeal.
"The administrative stay is hereby dissolved," Millett wrote, marking a significant victory for Kalshi. The judge also denied the CFTC's motion for a stay without prejudice, allowing the agency the option to refile in the future.
With U.S. elections only about a month away, it remains unclear whether Kalshi has resumed its contract listings. The platform did not respond immediately to requests for comments.
Event markets like Kalshi allow users to place bets on the outcomes of various events, including the upcoming U.S. elections and even the release dates of certain albums by artists like Taylor Swift. CFTC Chair Rostin Behnam has expressed concerns over a notable increase in event contracts available for trading on CFTC-registered exchanges since 2021.
The ongoing legal dispute between the CFTC and Kalshi began late last year when the CFTC claimed that Kalshi could not offer contracts related to congressional control. In a ruling last month, Judge Jia M. Cobb determined that the CFTC had overstepped its authority in opposing Kalshi's efforts to list election-related contracts, prompting the agency to appeal.
During Wednesday's proceedings, Judge Millett also addressed CFTC concerns regarding regulatory oversight of congressional contracts. Behnam had previously indicated that allowing such contracts would place the CFTC in a role beyond its Congressional mandate.
Despite these concerns, Millett noted that while the Commission would have the authority to investigate alleged manipulation, it could also rely on other federal agencies for specialized expertise.
The CFTC has chosen not to comment on the case at this time. The agency is currently working on rulemaking and voted in May to propose regulations that would ban bets on political events.
Disclaimer: This article is for informational purposes only and does not constitute legal, tax, investment, or financial advice.
