Kalshi cleared to restart election betting

The plot thickens with the saga surrounding prediction markets that cover political races, and Kalshi has scored a clear win, after receiving a go-ahead from the US Court of Appeals for the DC Circuit to continue offering its products readily.

Kalshi scores win allowing it to relaunch political betting markets

Kalshi is now officially accepting bets on election outcomes until such a moment that the Commodity Futures Trading Commission (CFTC) inflicts another legal blow against the platform.

In its decision, the court said that it agreed with the lower court’s opinion from September that Kalshi may continue offering prediction markets for the elections and said that the CFTC had failed to demonstrate that by allowing the platform to continue operations in this regard would indeed harm the public interest.

The Court of Appeals argued that none of the business conduct carried out by Kalshi was unlawful in its recent opinion. The CFTC has attacked Kalshi on several fronts, arguing that it offered a product that was within the regulator’s remit, and in doing so Kalshi had failed to follow due procedure.

The regulator’s objections have also been on moral ground, citing fears that Kalshi’s prediction markets could undermine the sanctity of elections, a view shared by a growing number of lawmakers.

The court did not dismiss the fears put forward by the CFTC and said that avoiding improper interference and misinformation are "paramount public interests." In a highly fraught electoral context, undermining the electoral process could lead to what the court described as irreparable harm.

However, the court did not see sufficient evidence mustered by the CFTC to prove its point, i.e., that Kalshi’s business model could harm the electoral process.

Kalshi is now going to accept wagers – as it has been before it received a brief stay earlier this year to stop offering prediction markets – on the US elections due on November 5, 2024.

Kalshi’s legal offensive finally pays off

Kalshi went on the offensive after the CTFC tried to prohibit it from launching its political betting markets. The platform said that the regulator had exceeded its remit and went on the offensive by challenging the CFTC in a court of law.

It has been more than a year now since the legal proceedings began. Kalshi was granted the green light to continue operating its prediction markets on political races, but a brief stay followed at the request of CFTC.

The DC District Court backed Kalshi in September, but it still honored the stay requested by the CFTC. The regulator argued that it needed time to argue its case. Having lost in the Court of Appeals, the CFTC is running out of options—and time.

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