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Kalshi, the U.S.-based prediction market platform, is locked in a legal battle that may define its future, hinging on its ability to list election betting contracts in time for the U.S. elections on November 5. The company recently celebrated a court victory, but the fight is far from over as the Commodity Futures Trading Commission (CFTC) continues to challenge the decision.
Background
Kalshi won its lawsuit against the CFTC last week after the regulator had previously banned it from listing contracts based on the outcome of U.S. congressional elections. The CFTC claimed such contracts were unlawful and amounted to gambling, a move that Kalshi countered as arbitrary and capricious. Although Judge Jia M. Cobb ruled in Kalshi’s favor, her detailed rationale is still pending.
Despite the win, Kalshi’s path remains complicated. Shortly after the ruling, the CFTC filed an emergency motion, requesting the court to delay Kalshi’s ability to list election-related contracts for another 14 days following the judge’s forthcoming opinion. The CFTC argued that it needs this time to determine whether to appeal the decision. If granted, this delay could push Kalshi’s launch of election markets into late September—crucial lost time as the election season heats up.
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Potentially Irreparable Harm
Kalshi has responded by warning the court that any further delays would cause “irreparable harm” to the company. In its latest filing, Kalshi pointed out that the CFTC could use this additional time to drag the process out until it’s too late to meaningfully launch these contracts. The company emphasized its dependence on this litigation for future business viability, noting that it has been unfairly locked out of this year’s booming election betting market.
The timing is critical for Kalshi, especially with competitors like PredictIt and Polymarket gaining market share during the litigation process. While PredictIt operates under a narrow regulatory exemption, Polymarket has faced its own restrictions, including a settlement with the CFTC barring U.S. residents from using the platform. Kalshi argues that the delay has allowed these competitors to dominate, despite Kalshi being fully regulated by the CFTC.
Supporters of Kalshi argue that election contracts serve a public interest by providing valuable tools for risk management and improving forecasting accuracy. With the U.S. election less than two months away, Kalshi believes there has never been a more critical time to introduce these contracts, but the clock is ticking.
