Kalshi launches election markets as CFTC turns to appellate court

After a court battle with the Commodity Futures Trading Commission — which isn’t quite over yet — Kalshi launched prediction markets for the upcoming US election.

The launch comes after the CFTC was denied another emergency stay by Judge Jia Cobb, who oversaw the case.

In a hearing early Thursday, Judge Cobb sided with Kalshi again. She told the CFTC she wouldn’t grant a stay, citing arguments made by Kalshi’s attorneys. 

CFTC attorneys, during the hearing, argued the contracts could pose a “public interest risk.” With the election just a few months out, Kalshi attorneys made a case that waiting any further to launch the markets could cause the company potential economic harm.

Read more: How prediction markets are bracing for post-election user drop-offs

The CFTC was previously granted a stay last week as it asked the judge to reconsider her order. 

In an opinion on Thursday, Cobb wrote, “Court finds that Kalshi’s congressional control contracts do not involve activity that is unlawful under any federal or state law, nor do they involve gaming.”

“Kalshi’s event contracts ask buyers to take a yes/no position on whether a chamber of Congress will be controlled by a specific party in a given term. That question involves (relates to, entails, has as its essential feature or any other iteration of the word) elections, politics, Congress and party control; but nothing that any party to this litigation has identified as illegal or unlawful activity,” she noted.

Tarek Mansour, Kalshi’s founder, said that Thursday marked the “the first trade on regulated election markets in nearly a century.”