As a seasoned analyst with over two decades of experience in the financial markets, I find myself intrigued by this latest development between Kalshi and the CFTC. Having navigated my fair share of regulatory battles in my career, I can empathize with the tenacity that it must have taken for Kalshi to finally secure approval to list prediction contracts on U.S. elections.
In a series of legal disputes with the Commodity Futures Trading Commission (CFTC), Kalshi has secured permission to offer contracts predicting which political party will control Congress.
Following a ruling by the U.S. Court of Appeals for the District of Columbia Circuit on October 2nd, Kalshi, the only U.S.-regulated prediction market, is now allowed to resume offering contracts related to Congressional events in the United States.
For over a year now, the startup has been engaged in a legal dispute with the Commodity Futures Trading Commission (CFTC). The startup, known as Kalshi, took the CFTC to court because the agency refused to grant permission for them to launch election outcome prediction markets.
As per the Commodity Futures Trading Commission (CFTC), allowing wagers on elections might potentially influence election outcomes to the detriment of public interests. Recently, a lower court decided it was acceptable for Kalshi to provide markets centered around the U.S. Congress.
13th September saw the CFTC receiving contracts, following which they successfully obtained a temporary halt order. This halt forced the exchange to postpone its events related to Congressional market activities while the CFTC initiated an appeal. However, Judge Patricia Millet dissolved this administrative stay and denied the commission’s request for it, stating that the CFTC did not provide evidence showing significant public harm would result without the pause.
Unlike Polymarket, Kalshi settles wagers using U.S. dollars; however, they started dealing with crypto-related events earlier this year. The triumph of Kalshi in the CFTC case at Congress could potentially open doors for their presidential election markets as well, according to Kalshi’s founder, Tarek Mansour, in an interview post the ruling.
US presidential election markets are legal. Officially. Finally.
Kalshi prevails.
— Tarek Mansour (@mansourtarek_) October 2, 2024
In recent times, competitors such as Polymarket have made significant strides in the U.S. election prediction betting market. Notably, data from Polymarket has been incorporated into Bloomberg’s platform, and their bettors have staked more than a billion dollars on the outcome of the next American presidential race.
The achievement of Polymarket has sparked a fresh wave of interest among competitors, as they ponder entering the decentralized betting sector. Notably, market maker Wintermute is teaming up with Chaos Labs for the debut of their prediction market within this industry.
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2024-10-02 19:50