CFTC appeals court ruling allowing Kalshi to list election contracts

The Commodity Futures Trading Commission (CFTC) has filed an appeal, arguing that a federal court made errors by allowing Kalshi, a betting platform, to list contracts related to the 2024 U.S. elections. 

In its Oct. 16 filing, the CFTC claims that the court misinterpreted the Commodity Exchange Act (CEA) and limited the regulator’s authority to oversee certain transactions.

The legal dispute between Kalshi and the CFTC began in November 2023, when Kalshi sued the CFTC after it barred the platform from listing political event contracts. 

In September, Kalshi won the case, with the Washington, D.C., federal court ruling that the CFTC could not prevent the platform from offering election-related contracts. 

Following the ruling, the CFTC filed an appeal, seeking an "emergency stay" to halt the listings until the case is resolved.

Kalshi’s election contracts, which include betting on outcomes like the presidential race and the state with the narrowest margin of victory, were legally permitted after the U.S. Court of Appeals for the District of Columbia Circuit denied the CFTC’s request for a stay. 

The CFTC has argued that Kalshi’s contracts resemble gambling, especially with the use of betting terminology such as "parlays," and should be prohibited under U.S. regulations. 

Despite the ongoing legal battle, Kalshi has continued to offer election betting contracts, while other prediction markets like Polymarket have seen substantial betting activity.

The final ruling on the CFTC’s appeal is expected after the election, with the CFTC’s final brief due on Dec. 6.