Despite Win Against CFTC, Kalshi’s Election Markets Listing Deferred

Kalshi did bag a victory against the CFTC last week, but it might have to hold its horses for a few more days before rolling out its prediction markets on the upcoming election in the US.

Background

• Towards the end of last week, Kalshi won its lawsuit against the CFTC
• Even though the judge did not give her rationale, the US-regulated prediction market platform was cleared to offer contracts on which party will control each house of Congress after the upcoming election
• Last year, the regulatory agency prohibited Kalshi from listing the Congressional control contracts. It equated its offering to unlawful gaming and said it would be "contrary to the public interest"
• Kalshi, in turn, sued the CFTC and branded its decision arbitrary and capricious

Details

• On Monday afternoon, a judge from the District Court for the District of Columbia called for a meeting later this week
• On the heels of the defeat on Friday, the CFTC asked the judge to pause the enforcement of her order for 14 days after publication of the opinion
• The agency’s lawyers contended that sans knowing her reasoning, they can't determine if the decision should be appealed or not it should appeal the decision
• The judge was supposed to publish her rationale via a subsequent formal written statement. However, she has not yet shed light on the publication time frame

Why should you pay attention?

• If the judge obliges to the CFTC’s “stay” order, it would temporarily prevent the immediate effects of the court's decision
• This will give the agency more time to consider next steps, such as appealing the ruling or preparing for its consequences

Implications

• If the CFTC’s motion is granted, Kalshi will not be able to go about listing election markets until late at least September  
• That would give the betting platform only a handful of weeks to take part in the election bonanza
• Kalshi’s fate will now be determined in the upcoming Thursday hearing