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The United States Commodity Futures Trading Commission (CFTC) has filed an emergency motion to prevent Kalshi, a U.S. prediction market platform, from launching election betting contracts. This urgent request follows a court ruling that overturned a previous order blocking Kalshi from offering such contracts.
In a September 6 court filing, the CFTC sought a temporary “emergency stay” on the ruling, asking the court to delay its decision for 14 days. The regulator needs time to understand the court’s reasoning behind overturning the original order before deciding whether to appeal.
Without the detailed judicial opinion, the CFTC claims it cannot properly evaluate its next steps, whether that be appealing or filing for a more permanent stay of the court’s decision.
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Kalshi Ready to Launch Election Markets
The CFTC’s sense of urgency is due to Kalshi’s plans to immediately list election contracts following the court ruling. The prediction market platform has already teased the upcoming launch on its homepage, stating that “Election Markets are Coming to Kalshi!” The CFTC fears that trading could begin any moment, creating potential legal complexities if the stay isn’t granted quickly.
Judge Jia Cobb of the U.S. District Court for the District of Columbia ruled in favor of Kalshi on the same day. The court allowed the platform to offer contracts that let users bet on the outcome of the U.S. election on November 4.
The court’s ruling directly contradicts the CFTC’s September 2023 decision. It argued that Kalshi’s election contracts were akin to illegal gambling under certain state laws and not in the public interest.
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Kalshi’s Legal Victory
Lawyers close to the case hailed the ruling as a significant win for Kalshi. Jake Chervinsky, the chief legal officer at Variant Fund, took to X to express his support for the decision, calling it a “HUGE win” for the prediction market platform.
However, he echoed the CFTC’s sentiment, stating that he, too, would like to see the court’s full opinion before celebrating. Chervinsky emphasized that this case is a key example of how the best way to handle regulatory overreach is through the courts.
