Federal Judge Approves U.S. Election Betting for Kalshi

A federal judge has authorized Kalshi to offer betting on U.S. congressional election outcomes, overturning a previous decision by the Commodity Futures Trading Commission (CFTC) that blocked such contracts. This ruling, made by U.S. District Judge Jia Cobb, allows Americans to place bets on whether Democrats or Republicans will control the House or Senate during election years. Kalshi plans to launch these contracts for trading next week, marking a significant shift in the legal landscape of election betting in the U.S. Kalshi's co-founder, Luana Lopes Lara, expressed optimism about the launch, indicating that additional political-event contracts will follow. The company had previously filed a lawsuit against the CFTC, arguing that the agency had overstepped its authority by prohibiting these contracts. The CFTC had contended that political-event contracts were akin to gambling and thus illegal under federal law, raising concerns about potential election manipulation. The ruling is historic, as it marks the first time in a century that election markets are legal in the United States. Kalshi's CEO, Tarek Mansour, highlighted the importance of this development, stating that it allows for trading on a U.S.-regulated market. While election betting is banned in several states, it is permitted in other countries, such as the U.K., where betting on U.S. elections is common. This decision comes at a time when other prediction markets, like Polymarket, have seen significant trading volumes despite being unavailable to U.S. users since a 2021 settlement with the CFTC. Kalshi aims to provide a safer alternative to foreign platforms and contribute valuable data for political analysis, potentially reshaping the landscape of political betting in the U.S.