Judge says CFTC exceeded its authority halting Kalshi election bets

A federal judge has granted partial summary judgment in Kalshi’s case against the United States Commodity Futures Trading Commission (CFTC), paving the way for the prediction market to list bets related to elections.

In a Sept. 12 opinion filed in the US District Court for the District of Columbia, Judge Jia Cobb said that the CFTC “exceeded its statutory authority” by issuing an order halting Kalshi’s election markets. The commission argued that gambling on the US political races could disrupt markets and potentially threaten election integrity.

“Kalshi’s contracts do not involve unlawful activity or gaming,” said Judge Cobb. “They involve elections, which are neither. Although the Court acknowledges the CFTC’s concern that allowing the public to trade on the outcome of elections threatens the public interest, this Court has no occasion to consider that argument.”

The judge’s opinion suggested that Congress must issue an order authorizing the CFTC to block Kalshi’s activities. Under federal or state law, Judge Cobb said, Kalshi’s elections contracts “do not involve activity that is unlawful” or constitute “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 […] elections, politics, Congress, and party control; but nothing that any Party to this litigation has identified as illegal or unlawful activity.” 

This is a developing story, and further information will be added as it becomes available.