Kalshi Gains Approval to Resume Congressional Prediction Contracts Ahead of U.S. Elections
As the U.S. election approaches, Kalshi, a regulated prediction market, has received authorization to relaunch its contracts that predict which party will control each house of Congress. This development follows a recent ruling by the U.S. Court of Appeals for the District of Columbia, which denied a motion from the Commodity Futures Trading Commission (CFTC) aimed at halting these contracts while the agency appeals a prior court decision.
On Tuesday, Circuit Judge Patricia Millett stated, “The Commission has failed to demonstrate that it or the public will suffer irreparable injury absent a stay pending appeal… The administrative stay is hereby dissolved.” This ruling is significant for Kalshi, which had previously faced challenges in listing its election-related contracts due to the CFTC’s concerns about the nature of these contracts being akin to gambling and not serving the public interest.
Kalshi’s legal battle with the CFTC began last year when the agency rejected the exchange’s initial application to offer election contracts. Kalshi contended that such contracts provide a valid marketplace for informed predictions about electoral outcomes, thereby contributing to public discourse. Following the favorable ruling from the lower court, Kalshi listed its contracts on September 13, but trading was cut short after only a few hours due to an administrative stay imposed by the appeals court.
With the administrative stay now lifted, Kalshi is poised to resume trading on these contracts. A spokesperson for the company indicated that while there is no set timetable for the relaunch, it is expected to happen “very soon.” This is particularly relevant considering the heightened interest in political betting as the election date draws closer.
In contrast to Kalshi’s regulated platform, Polymarket, a crypto-based prediction market that is currently prohibited from doing business in the U.S., has seen substantial activity. Despite its limitations, Polymarket has reported over $1 billion staked on its contracts regarding the presidential election. This disparity highlights the growing demand for political prediction markets, especially in an election year.
Kalshi, based in New York, has positioned itself as a legitimate alternative to unregulated platforms like Polymarket. The ongoing legal struggles with the CFTC have brought attention to the broader issues surrounding the regulation of prediction markets in the U.S. and the balance between government oversight and free market principles.
Conclusion
The recent court ruling marks a pivotal moment for Kalshi and the future of regulated prediction markets in the United States. As the election nears, the opportunity for voters and stakeholders to engage in informed speculation on electoral outcomes is set to increase, potentially reshaping how political forecasts are made and consumed.
- Key Points:
- Kalshi has been cleared to resume contracts on party control in Congress.
- CFTC’s motion to halt trading was denied by the appeals court.
- The ruling is a significant win for Kalshi against regulatory challenges.
- Kalshi’s contracts were briefly listed before trading was interrupted.
- Polymarket has seen record volumes despite regulatory barriers.