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Kalshi Wins Approval to List Political Prediction Contracts
Following a series of legal battles with the Commodity Futures Trading Commission (CFTC), Kalshi has secured approval to list prediction contracts on which political party will dominate Congress. This decision came from the United States Court of Appeals for the District of Columbia Circuit on October 2.
Kalshi, the only U.S.-regulated prediction market, can now resume listing its Congressional event contracts in America. The startup has been in a legal tussle with the CFTC since last year, when the agency denied it permission to offer election outcome prediction markets.
Background of the Legal Battle
The CFTC had expressed concerns that allowing betting on elections could influence political results and harm the public interest. Despite these concerns, a lower court ruled last month that Kalshi could list markets focused on the U.S. Congress.
On September 13, hours after Kalshi began fielding these contracts, the CFTC won a stay order, forcing the exchange to pause its Congressional event markets while the CFTC launched an appeal. However, Circuit Judge Patricia Millet dissolved the administrative stay and denied the commission’s motion, stating that the CFTC failed to prove irreparable public damage would occur without the pause.
Kalshi’s Unique Position in the Market
Unlike competitors such as Polymarket, Kalshi settles bets in U.S. dollars. The firm has also introduced crypto-related events earlier this year. The recent victory over the CFTC in the Congressional markets case could potentially pave the way for Kalshi to offer presidential election markets as well. Kalshi founder Tarek Mansour expressed optimism on social media, stating:
“US presidential election markets are legal. Officially. Finally. Kalshi prevails.”
Competitive Landscape
While Kalshi has been embroiled in legal challenges, rivals like Polymarket have captured significant market share in the U.S. election prediction betting scene. Polymarket data has been integrated into major financial platforms, and its users have placed over $1 billion in wagers on the next American president.
The success of Polymarket has inspired new entrants into the on-chain betting industry. Market maker Wintermute, for instance, plans to launch its own prediction market in collaboration with Chaos Labs.
As the landscape of prediction markets continues to evolve, Kalshi’s recent court victory marks a significant milestone. This development not only reaffirms the legality of political prediction markets but also sets the stage for further innovation and competition in this space.
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