Kalshi traded election bets for just a few hours yesterday (12 September) before another stay was ordered by a federal appeals court.
The DC Circuit of Appeals granted the temporary stay after the Commodity Futures Trading Commission (CFTC) filed an emergency motion with the court.
The stay is another delay in Kalshi offering election betting on its platform less than two months ahead of the November presidential election.
It follows the lower court ruling last week, following a year-long court battle, the Commission was wrong to ban Kalshi election event contracts.
The opinion read: “The CFTC’s order exceeded its statutory authority. Kalshi’s contracts do not involve unlawful activity or gaming. They involve elections, which are neither.”
In its emergency motion to the DC Circuit, the CFTC argued there was an acute risk of short-term manipulation of election markets and threats to election integrity.
The filing said: “Thus, the Commission requests a short administrative stay, suspending trading on the election contracts while this Court deliberates on whether a further stay is warranted.”
The CFTC voted to authorise the appeal on Monday, with commissioner Caroline D. Pham dissenting.
The Biden appointee argued the move was rushed, as the court issued its summary judgement ahead of its full opinion.
Kalshi urges quick ruling
In a letter filed with the court, Kalshi argued a stay should be brief to minimise the harms that would flow from it again having to pause trading.
The prediction market said: “With the election just weeks away, Kalshi will suffer serious and irreparable harm from any further delay.
“There are thus no grounds for even a brief administrative stay—much less a stay pending appeal.”
Kalshi also committed to responding to the Commission’s motion within 24-hours, which it argued would allow the court to rule by Monday.
The court case will be closely watched by other businesses seeking to offer election betting, with broker Interactive Brokers stating in a release it aims to launch its own election event contracts from next week.
New Zealand-based prediction exchange PredictIt is involved in separate litigation efforts against the CFTC.
The legal battle is the latest fight in the CFTC’s ongoing attempt to clamp down on election betting.
The US derivatives regulator in May proposed new rulemaking that would classify election event contracts as gaming, and therefore ban them under agency guidelines.