Federal judge permits Kalshi to bet on US elections
- A federal judge ruled in favor of Kalshi, allowing it to offer betting on the November elections.
- The CFTC argued that such contracts could harm electoral integrity and appealed the decision.
- Kalshi's contracts are seen as beneficial for election forecasting, marking a significant development in legal political gambling.
On Thursday, a federal judge in Washington, DC, ruled in favor of Kalshi, allowing the prediction market to offer betting on the upcoming November elections. This decision came after the Commodity Futures Trading Commission (CFTC) attempted to block Kalshi's contracts, arguing they were illegal and could undermine electoral integrity. Judge Jia Cobb stated that Kalshi's contracts do not involve unlawful activity, emphasizing that they pertain to elections, which are not illegal. The CFTC quickly appealed the ruling, expressing concerns about the potential commodification of elections and the agency's ability to monitor such contracts. Kalshi launched congressional control contracts, enabling Americans to bet on which party will control the House and Senate in 2025. The company argued that these contracts could provide valuable data for election forecasting and allow individuals to hedge their bets on various outcomes. The CFTC's chairman, Rostin Behnam, warned that allowing such contracts would push the agency beyond its intended regulatory scope, likening it to becoming an 'election cop.' Despite the CFTC's objections, Kalshi maintained that the contracts serve the public interest. The company highlighted the rise of unregulated prediction markets like Polymarket, which have gained popularity during the ongoing legal dispute. Kalshi's co-founder celebrated the ruling, indicating a significant step forward for legal political gambling in the U.S. The CFTC has been pursuing a broader crackdown on event-based betting, proposing rules to ban contracts related to elections and other events. This ongoing tension between regulatory bodies and emerging prediction markets reflects the evolving landscape of gambling and betting in the United States.