CFTC Says Court “Erred at Every Turn” in Allowing Kalshi’s Election Markets
The United States Commodities Futures Trading Commission has criticized a federal court decision allowing bets on election-related event contracts by platform provider Kalshi for the forthcoming US elections in 2024. In an October 16 filing, the regulator contended that the district court presiding over Kalshi’s lawsuit against the CFTC had “mistakenly erred” in its ruling.
CFTC Appeals Court Ruling on Kalshi’s Election Contracts
The CFTC said the court had overlooked important definitions in the Commodity Exchange Act when it issued its ruling in favor of Kalshi. The regulator said the court had failed to make important delineations between “gaming” and “event-focused” contracts, allowing Kalshi to move forward with the election betting markets.
It sued the CFTC in November 2023, aiming to reverse a ban on listing political event contracts. In September 2024, it won that case, with a federal court ruling that the CFTC couldn’t block the platform from letting users bet on election contracts.
CFTC’s Efforts to Halt Election Betting Markets
After the defeat in court, the CFTC filed an application for an emergency stay to block Kalshi from listing such contracts. However, on October 2, the US Court of Appeals for the District of Columbia Circuit refused the request, and from October 7 onward, Kalshi was legally cleared to offer election betting markets.
But it didn’t waste any time in between to hit the ground running: dozens of election-related contracts appeared on the platform within seconds. Among them are odds on the outcome of the presidential election, popular vote winners, and predictions on which state will have the narrowest margin of victory.
CFTC Continues Legal Fight
But even though Kalshi won in court, them continued to oppose the listing of election markets, likening the products on offer from the platform to gambling. In its latest filing, dated Oct. 16, the agency cited Kalshi’s use of terms like “parlays” – a common term in sports wagering – in touting election outcomes.
That has left Kalshi waiting on the final decision while it is still engaged in a legal battle, which has barred further expansion into the election betting market. Meanwhile, other platforms like Polymarket have capitalized on the void to churn out billions of dollars in betting volume during the legal standoff.
