A District Court lifted the CFTC’s order against Kalshi offering election contracts. The CFTC requested an emergency stay to prevent Kalshi from offering the contracts.
Judge Jia Cobb of the US District Court lifted the Commodity Futures Trading Commission’s (CFTC) order, forcing Kalshi Inc. from offering event contracts predicting the outcome of the US Presidential elections, which users could bet on. A Bloomberg report first broke the news.
The CFTC issued the order in September 2023 stating that betting contracts related to the outcome of elections undermine the integrity of US democracy. As that order was overturned, Tarek Mansour, co-founder and CEO of Kalshi, mentioned, “Election markets are now legal in the United States for the first time in 100 years.”
The CFTC Fires Back
Although Judge Cobb ruled in Kalshi’s favor, the CFTC brought an emergency stay motion to prevent Kalshi from proceeding with offering election-related contracts. “Without the benefit of the Court’s reasoning, the CFTC is unable to make an informed decision whether to appeal, nor is it able to fully brief a motion for stay pending any forthcoming appeal,” the CFTC’s court filing read. It continued, “The CFTC, therefore, respectfully requests that the Court stay the vacatur of the CFTC’s September 22, 2023 order until two weeks (14 days) after the Court issues its reasoned opinion.”
The CFTC further elaborated that Kalshi could list contracts as soon as Tuesday, and the platform’s messaging on its website indicates it plans to act soon. Kalshi’s homepage read, “Election Markets are Coming to Kalshi!” The regulator said the 14-day stay would do “little if any harm” when requesting the court to grant it. It mentioned that the stay would help it “make an informed decision” about appealing the decision.
The agency defended its request for the stay, saying, “Both the balance of harms and the public interest factors are in the Commission’s favor to at least allow the Commission time to review the Court’s explanation of its decision and seek further relief from the Court before Kalshi lists the contracts for trading.”
