Kalshi Celebrates Victory as CFTC Backs Down
The U.S. Commodity Futures Trading Commission (CFTC) is stepping back from its legal challenge against prediction platform Kalshi, signaling a potential green light for political betting markets in the United States.
In a May 5 filing with the U.S. Court of Appeals for the District of Columbia Circuit, CFTC attorneys submitted an unopposed motion to voluntarily dismiss their appeal. This request, which awaits court approval, may close the door on the agency’s attempt to prevent Kalshi from listing election-based contracts.
Kalshi, which had previously sued the CFTC after being ordered to cease offering political event markets, agreed to cover its own legal expenses under the terms of the joint filing.
A Turning Point for Political Betting in the U.S.
Following the CFTC’s filing, Kalshi posted on X (formerly Twitter) declaring, “Election markets are here to stay,” a statement that underscores growing support for such markets.
- Kalshi launched in 2021 and quickly attracted attention, especially from crypto users, with contracts tied to political outcomes like the 2024 U.S. election.
- The platform’s legal battle with the CFTC began in 2023, when the regulator sought to shut down its election markets.
- After winning in a lower court, Kalshi faced a CFTC appeal in September 2024—an effort the agency now seeks to abandon.
Political Shifts and Regulatory Reversals
The decision to drop the appeal may reflect shifting priorities within the CFTC under the new presidential administration. Acting CFTC Chair Caroline Pham, appointed by President Donald Trump, has taken the reins from Biden-era leadership. Commissioner Summer Mersinger, a Biden nominee, had already indicated in February that election markets might be here to stay—a view that now seems to align with the regulator’s latest move.
While the CFTC previously argued that political betting could lead to market manipulation and threaten public interest, its new stance suggests a willingness to reevaluate the role of prediction markets in the financial ecosystem.
