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
