A federal judge made a significant decision last month, allowing prediction market company Kalshi to list and trade contracts related to the upcoming 2024 U.S. elections. This ruling is now being challenged by the U.S. Commodity Futures Trading Commission (CFTC), which claims the judge “erred” in his ruling.
In a brief filed with an appellate court on Wednesday, CFTC attorneys reiterated their concerns that the district court judge ignored key definitions under the Commodity Exchange Act. They argued that the judge “without basis” barred the CFTC from examining any “transactions” that involve gaming.
The CFTC had sought to prevent Kalshi from launching its election the appellate court ruled that the CFTC failed to demonstrate any “irrevocable harm” would occur if Kalshi proceeded. As a result, Kalshi has now listed various election-related contracts, including predictions about the winner of the U.S. presidential election and outcomes for individual states.
The CFTC’s filing emphasized that the agency did not use a broad enough definition of gaming in rejecting Kalshi’s request to launch these markets. The CFTC expressed concern about Kalshi’s decision to offer a wide array of betting contracts, including predictions on the presidential winner, popular vote margins, and even state-level outcomes.
They noted that Kalshi’s website hinted at upcoming contracts, including “parlays”—a term commonly associated with sports betting.
Kalshi, one of only two U.S.-regulated prediction markets that settle trades in dollars (the other being Interactive Brokers’ ForecastEx), had been unable to participate in the election betting boom due to the ongoing legal proceedings. Meanwhile, crypto-based offshore platform Polymarket has taken the lead in this space.
