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After a protracted legal battle with the Commodity Futures Trading Commission (CFTC), Kalshi, a regulated U.S. prediction market, has received permission to trade contracts on political outcomes. On October 2, the United States Court of Appeals for the District of Columbia Circuit made a decision allowing Kalshi to once again market prediction contracts that center on the party that will control Congress.
This triumph comes after a protracted legal dispute with the CFTC, which had earlier refused Kalshi’s request for authorization to provide these markets. Allowing betting on election results, according to the CFTC, might sway political outcomes and be detrimental to the general welfare. In response, Kalshi filed a lawsuit against the regulatory authority, contesting its ruling to forbid the sale of election-related prediction contracts.
The conflict reached a turning point in September when a lower court ruled in Kalshi’s favor, allowing it to list Congressional event contracts. However, just hours after launching the contracts on September 13, the CFTC obtained a stay order, temporarily halting the markets. This forced Kalshi to pause its Congressional betting markets while the CFTC appealed.
In a decisive move, Circuit Judge Patricia Millet lifted the stay, ruling that the CFTC had not demonstrated that the continuation of Kalshi’s markets would cause irreparable harm to the public. This decision has reopened the door for Kalshi to offer its prediction contracts, a development that may also pave the way for future presidential election markets.
Kalshi’s victory comes at a time when competitors, like Polymarket, have already claimed significant market share in the U.S. election betting scene. Polymarket, which deals in on-chain crypto betting, has integrated its data into Bloomberg’s terminal and processed over $1 billion in wagers on upcoming elections. The rise of platforms like Polymarket has attracted attention from major market players, including Wintermute, which is planning to launch its own prediction market in partnership with Chaos Labs.
With its legal win, Kalshi now has an opportunity to expand in the highly competitive prediction market space, where political outcomes and other event contracts are gaining increased popularity.