CFTC Drops Appeal in Favor of Kalshi, Solidifying Its Stance on Election Markets

By: Eliza Bennet

The legal contest between the Commodity Futures Trading Commission (CFTC) and prediction market platform Kalshi is nearing resolution, as the U.S. regulator has decided to withdraw its appeal against a prior court ruling. This development could pave the way for Kalshi to offer election-based event contracts without additional regulatory hurdles.

Kalshi has been embroiled in a legal battle after the CFTC sought to prevent the platform from listing contracts that allow users to bet on the outcomes of U.S. elections. The ruling from a federal court previously favored Kalshi, declaring that the CFTC could not block the platform from listing such contracts. Now, the CFTC has filed an unopposed motion for voluntary dismissal in the U.S. Court of Appeals for the District of Columbia Circuit, suggesting a consensus has been reached between the parties involved.

In addition to dropping the appeal, both the CFTC and Kalshi agreed on cost-bearing terms. Kalshi announced that it would manage its own legal expenses without seeking remuneration from the regulator. Following the motion filing, Kalshi took to social media, asserting, "election markets are here to stay," indicating the company’s confidence in moving forward with offering these politically charged contracts.

This decision by the CFTC indicates a momentous shift in the regulatory landscape for prediction markets in the United States, highlighting potential new frontiers for political event betting. It remains to be seen how the resolution of this case will influence other platforms seeking to explore similar opportunities. Interested parties can learn more about Kalshi and follow updates as this field continues to evolve.