A federal judge has supported Kalshi in their case against the United States Commodity Futures Trading Commission (CFTC), paving the way for prediction markets to list bets related to elections.
Court Decision
On September 12, Judge Jia Cobb issued an opinion in the US District Court for the District of Columbia, stating that the CFTC “exceeded its statutory authority” by issuing an order halting Kalshi’s election markets. The commission argued that gambling on US political races could disrupt markets and potentially threaten election integrity.
Arguments of the Parties
Judge Cobb noted that Kalshi’s contracts do not involve unlawful activity or gaming. “They involve elections, which are neither. Although the Court acknowledges the CFTC’s concern that allowing the public to trade on the outcome of elections threatens the public interest, this Court has no occasion to consider that argument.”
Future of Kalshi and CFTC
The judge's opinion suggested that Congress must issue an order authorizing the CFTC to block Kalshi’s activities. Under federal or state law, Kalshi’s elections contracts do not involve activity that is unlawful or constitute gaming. This is a developing story, and further information will be added as it becomes available.
This case is likely to have significant implications for the regulation of prediction markets in the future. The court's decision may trigger further legislative steps by Congress.
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