Kalshi, a platform that provides futures contracts on real-world events, has achieved a significant legal victory in its ongoing confrontation with the U.S. Commodity Futures Trading Commission (CFTC). The CFTC had previously blocked Kalshi’s plans to offer election betting contracts, claiming it constituted illegal gambling. However, this recent ruling opens the door for Americans to place bets on the outcomes of upcoming Congressional elections.
Kalshi Wins Over CFTC
In November of last year, Kalshi took legal action against the U.S. CFTC after the regulatory body blocked its attempt to offer contracts that would allow individuals to bet on which political party would control each house of Congress following the November 2024 U.S. elections. The CFTC viewed these contracts as unlawful gambling activities that were not in the public interest.
On September 6, 2024, U.S. District Judge Jia M. Cobb ruled in favor of Kalshi, marking a significant legal victory for the company. However, the judge’s detailed reasoning behind this decision is expected to be revealed in a forthcoming opinion, the timing of which remains undisclosed.
Following the court ruling, Kalshi quickly declared its victory on its website, stating, “We did it! U.S. election markets are coming to Kalshi.” This ruling significantly changes the landscape, allowing Kalshi to offer its election-based contracts, which had previously been prohibited by the CFTC.
CFTC Seeks 14-Day Delay in the Outcome
Despite the legal win for Kalshi, the CFTC is not ready to give up the fight. The regulatory commission promptly filed an emergency motion, requesting the court to delay the ruling for 14 days following the publication of the judge’s opinion. The CFTC argues that it requires this time to thoroughly review the court’s reasoning and to determine whether it will pursue an appeal. Additionally, the commission needs this period to file a more comprehensive motion to stay the ruling pending any potential appeal.
What’s Next for Kalshi?
If the court grants the CFTC’s request for a 14-day delay, Kalshi’s election markets will remain on hold until at least late September. This delay is particularly consequential as Kalshi has already been sidelined from this year’s booming election betting scene, which has been dominated by Polymarket, a crypto-based competitor.
Kalshi’s victory signifies a pivotal moment in the ongoing battle for regulated election betting markets in the United States. This ruling could potentially pave the way for a new era in which Americans can legally engage in election betting, provided the court’s final opinion supports this direction.
As the situation continues to unfold, all eyes will be on the forthcoming opinion from Judge Jia M. Cobb, which will provide more insight into the legal reasoning that led to this landmark decision. For now, Kalshi stands poised to revolutionize the election betting market, pending any further legal challenges.
