Kalshi Awaits Decision On Election Prediction Markets

According to CoinDesk, Kalshi has achieved a court victory over regulators but must wait until at least Friday to list its prediction markets for the upcoming U.S. election. On Monday, Judge Jia Cobb of the U.S. District Court for the District of Columbia scheduled a Thursday hearing and stayed her previous order that allowed Kalshi to list event contracts on which party will control each house of Congress after the election. Last year, the U.S. Commodity Futures Trading Commission (CFTC) barred Kalshi from listing such contracts, citing concerns about potential damage to the integrity of elections if traders were allowed to bet up to $100 million. Kalshi subsequently sued the CFTC. In her ruling last Friday, Judge Cobb sided with Kalshi but did not provide her rationale, which she said would be detailed in a subsequent opinion. The timing of this opinion's publication remains unknown. Following its defeat, the CFTC filed an emergency motion requesting a 14-day stay of Cobb's order after the opinion's publication. The agency argued that without understanding the judge's reasoning, it could not determine whether to appeal the decision. If granted, this stay would prevent Kalshi from listing election markets until late September at the earliest, leaving the company with limited time to participate in this year's election betting. However, the stay ordered by Judge Cobb on Monday will last only until the end of Thursday's hearing. Depending on the outcome, Kalshi might still be able to list the markets as soon as Friday. Kalshi is the only CFTC-regulated prediction market in the U.S., where it lists contracts on various events, including U.S. students' test scores and bitcoin prices. Trades are settled in dollars. PredictIt, another U.S.-only site, lists election contracts under a narrow regulatory exemption, while Polymarket, a notable player in prediction markets and cryptocurrency, is barred from doing business with U.S. residents under a CFTC settlement. Both companies have gained market share at Kalshi's expense, as noted in Kalshi's weekend filing opposing the CFTC's proposed delay.