By BBBB
A federal appeals court in Washington, DC has ruled that a online betting platform Kalshi can offer legal political gambling ahead of the US presidential election.
The panel of three judges denied the Commodity Futures Trading Commission’s (CFTC) request to halt a previous ruling that allows the platform to launch political betting markets while an appeal is heard.
Kalshi launched its political futures contracts on September 12th after US District Judge Jia Cobb in Washington DC denied the commission’s attempt to prevent the platform from offering them. The CFTC swiftly appealed the ruling. Subsequently, the DC Circuit Court of Appeals temporarily halted Kalshi from offering the bets while reviewing the agency’s request for a temporary suspension.
The regulator had argued that political wagers are illegal and that any markets offered could harm the integrity of the election.
CFTC General Counsel Rob Schwartz said at the hearing:
“I don’t want to be too dramatic, but we live in a country where tens of millions of Americans believe the last presidential election was stolen.”
However, the panel noted that the commission had failed to fully explain how the election would be affected and denied the request.
Judge Patricia Millett wrote for the DC Circuit Court of Appeals:
“In short, the concerns voiced by the Commission are understandable given the uncertain effects that Congressional Control Contracts will have on our elections, which are the very linchpin of our democracy.
But whether the statutory text allows the Commission to bar such event contracts is debatable, and the Commission has not substantiated that risks to election integrity are likely to materialize if Kalshi is allowed to operate its exchange during the pendency of this appeal.”
The court noted that the regulator can make another bid to halt the ruling while the appeal takes place, but that any further attempt would require more detailed proof that the election would be negatively impacted.
Following the ruling, Kalshi relaunched its markets for the presidential election and which party will gain control of the House and Senate in 2025. The platform allows for bets of as much as $100 million on its election markets.
Kalshi CEO Tarek Mansour said in a statement:
“We are incredibly honored to bring safe, regulated, and trusted election markets to the US. This week is the dawn of a new era for financial markets.”
English