US Court Allows Kalshi To List Election Event Contracts

According to Cointelegraph, a United States federal appeals court has permitted Kalshi, a derivatives exchange, to list event contracts tied to US election outcomes. This decision, made on October 2, opens the door for election prediction markets, including Web3 platforms like Polymarket, to operate within the US. The US Court of Appeals for the District of Columbia Circuit ruled against the Commodity Futures Trading Commission’s (CFTC) attempt to prevent Kalshi from listing derivatives linked to political outcomes. This ruling comes just before the US presidential election, where over $1 billion is at stake on Polymarket as of October 2. In September, Kalshi won a lawsuit against the CFTC, which had previously issued an order prohibiting the listing of political event contracts. The CFTC argued that these contracts involved gaming activities that were unlawful under state law and contrary to public interest. Specifically, the CFTC targeted contracts wagering on which US party would control Congress after the November federal elections. On September 12, the CFTC appealed the court’s decision and sought a court order to bar Kalshi from listing any event contracts until the appeal was resolved. However, the October 2 ruling stated that the Commission could not obtain a stay because it had not demonstrated that it or the public would be irreparably harmed while the appeal was heard. The September federal circuit court ruling also argued that the CFTC overstepped its bounds by blocking contracts on broad public interest grounds if they otherwise complied with US financial regulations. The judge emphasized that the case was not about personal opinions on Kalshi’s product but about adherence to regulatory compliance.