CFTC Drops Appeal, Clearing Path for Kalshi’s Election Markets

In a move that effectively concludes a lengthy two-year legal battle over election markets, the U.S. Commodity Futures Trading Commission (CFTC) has announced it was dropping its appeal against prediction market operator Kalshi.

The result effectively paves the way for Kalshi and others to offer lawfully sanctioned election-based event contracts in the United States.

The dispute arose when Kalshi sued the CFTC in 2023 following the regulator’s decision to block the firm from offering event contracts before the congressional elections. However, with the complaint now retracted, it could signal the beginning of the end of the long-running debate surrounding the legitimacy of prediction markets.

This follows an earlier court ruling in Kalshi’s favor in September, yet Monday’s dismissal requested by the CFTC ultimately finalizes the 2024 judgment. As part of the mutually agreed resolution, both sides have since agreed to pay their own legal costs.

Kalshi Describes CFTC Election Victory as “Historic”

“Today is historic. We have always believed that doing things the right way, no matter how hard, no matter how painful, pays off,” Kalshi CEO Tarek Mansour said in a statement after the announcement.

Kalshi’s rise to prominence parallels a broader policy shift in Washington. Particularly given that one of the Trump administration’s earliest directives actively rolled back regulatory scrutiny on tech-driven financial firms, devised to allow start-ups like Kalshi to operate under fewer constraints.

The most telling example is President Trump’s appointment of Brian Quintenz as chair of the CFTC. Quintenz is a former commissioner best known for his outspoken support for digital innovation in the derivative marketplace.

Incidentally, Quintenz has also previously served on Kalshi’s board and has long advocated deregulating event-based trading.

Kalshi’s event contracts—which include covering Senate races, state governor primaries, and presidential nominations—have drawn political scrutiny and extensive consumer buy-in. While federal approval now offers Kalshi et al. substantial operating safeguards, state-level opposition persists.

Crypto and Sports Contracts Push the Boundaries

In a more recent venture, Kalshi has also begun accepting crypto payments—including USDC stablecoin deposits—in a bid to court more tech-savvy traders. They have also quietly expanded into offering sports contracts, including events such as the Super Bowl, to test the legislative limits as to what qualifies as a federally regulated derivative.

State-based regulators have labeled the practice as unlicensed sports betting. Kalshi’s retort to these claims argues that its latest offerings comply with the approved CFTC frameworks.

Mansour has continuously taken this position, claiming, “The CFTC is our regulator. If the CFTC tells us to stop, we will absolutely stop. If they don’t, then we won’t.”

Following the CFTC’s decision earlier this week, Mansour wrote in a celebratory post, “Prediction markets have been banned, censored, limited, and pushed out for decades. This win solidifies their right to exist and thrive.”

The CFTC’s Kalshi case revelation came the same week the agency announced it had placed several employees on administrative leave for alleged ethical and legal violations. However, it remains unclear if these are connected or a consequence of the Kalshi case announcement.

The Commission’s decision to abandon its appeal also follows the cancellation of a roundtable summit on prediction and sports markets, which had been scheduled for April 30. With a new date still to be rescheduled, Kalshi and its board of directors will be reveling in what appears to be a shift in favor of regulatory restrictions. Several letters of opinion have been filed by industry stakeholders, ranging from tribes to operators and professional sports leagues.

The post CFTC Drops Appeal, Clearing Path for Kalshi’s Election Markets appeared first on CasinoBeats.

 In a move that effectively concludes a lengthy two-year legal battle over election markets, the U.S. Commodity Futures Trading Commission (CFTC) has announced it was dropping its appeal against prediction market operator Kalshi. The result effectively paves the way for Kalshi and others to offer lawfully sanctioned election-based event contracts in the United States. The
The post CFTC Drops Appeal, Clearing Path for Kalshi’s Election Markets appeared first on CasinoBeats.