Kalshi can again allow customers to place election bets after winning its lawsuit against the US derivatives regulator.
The District Court of Columbia on Friday (6 September) sided with the US-based prediction market in a summary judgement, overturning a September 2023 order that had blocked it from allowing election event contracts to be traded.
It follows the CFTC’s recent attempt to crackdown on election betting through proposed rule-making that would classify event contracts on the outcome of political contests as “gaming”, and therefore prohibited under its rules.
In a notice posted on its website Kalshi said: “We did it! U.S. election markets are coming to Kalshi.”
While the Commission can appeal the judgement, the ruling will allow Kalshi for now enter the election betting market just two months ahead of the US presidential election.
Kalshi’s crypto-based competitor Polymarket is generally considered to be among the leaders in this space, although US residents cannot legally bet though it.
Judge Jia M. Cobb did not give her reasons for the decision but said she would in an upcoming memorandum opinion.
CFTC attempts to order stay
Just hours after the opinion was released, the CFTC submitted an emergency motion to stay the court’s decision until two weeks after it has offered the reasoning for the decision.
This, the Commission argued, is because it is unsure of whether it will appeal until it has read the full judgement.
Kalshi submitted a memorandum opposing the motion, arguing it was an attempt to waste time ahead of the November election.
The exchange said: “The Commission lost, fair and square, on the law. It should not be allowed to snatch a procedural victory from the jaws of defeat by running out the clock.
“That delay—which the agency would assuredly try to parlay into another, then another, until it is too late—would be devastating for Kalshi, which has staked its future on this litigation and these markets.”
Kalshi opted to sue the CFTC in November 2023, arguing the Commission had exceeded its statutory authority.
The company said in its complaint: “At bottom, it is undeniable that election outcomes have consequences for everyone; they play a pivotal role in determining our collective future.
“Allowing people to trade safely on election outcomes will give them the freedom to protect their financial interests.
“A legitimate market will also yield more credible and transparent election forecasting, especially relative to the bias of polling.”