The Commodity Futures Trading Commission (CFTC) went too far when it stopped Kalshi from giving election prediction markets, according to a federal judge. Judge Jia Cobb made this decision on September 12 in the US District Court for the District of Columbia. It lets Kalshi bet on US elections.
In his ruling, Judge Cobb said that the CFTC did not have the legal power to try to stop Kalshi’s election markets. The commission was worried that letting people bet on U.S. political results could mess up markets and put the fairness of the election at risk.
Judge Cobb made it clear in her ruling that Kalshi’s contracts, in which he bets on which political party will control a chamber of Congress during a certain term, are not illegal or gambling. Judge Cobb made it clear that the CFTC’s worries about the public interest are not taken into account in the legal evaluation of Kalshi’s actions.
The judge said that any moves against Kalshi’s election-related contracts would need to be approved by Congress, not the CFTC. She also said that Kalshi’s contracts have to do with politics and elections and don’t involve doing anything wrong.
Even though the decision was made, it is still unclear if Kalshi will instantly start taking bets on U.S. congressional elections, since the election is coming up soon and there are still legal proceedings going on. While the CFTC thinks about whether to appeal Judge Cobb’s ruling, it has asked an appeals court to stop Kalshi’s new markets right away.
Some people don’t agree with Kalshi’s decision to list election prediction markets. The CFTC says that these markets could threaten the security of the election. Judge Cobb’s decision, on the other hand, makes it clear that the current law framework does not support the CFTC’s case against Kalshi’s actions.
