Your support helps us to tell the story
Betting on the outcome of US congressional elections may now be legal thanks to a Wednesday federal appeals court ruling.
The Commodities Futures Trading Commission asked the appeals court to block Kalshi — a financial exchange startup — from offering “Congressional Control Contracts.” The contracts allow buyers to bet on which political parties will win the House and Senate following the 2024 election.
On Wednesday, the appeals court declined to block a lower court’s decision that allowed betting on the outcomes, opposing the CFTC’s argument that the betting could “potentially be used in ways that would have an adverse effect on the integrity of elections, or the perception of integrity of elections.”
Last month the US District Court for the District of Columbia sided with Kalshi, which argued that the CFTC had overreached by trying to block its betting market, The Hill reports.
“In short, the concerns voiced by the Commission are understandable given the uncertain effects that Congressional Control Contracts will have on our elections, which are the very linchpin of our democracy,” Judge Patricia Millett wrote in the opinion of the original ruling. “But whether the statutory text allows the Commission to bar such event contracts is debatable, and the Commission has not substantiated that risks to election integrity are likely to materialize if Kalshi is allowed to operate its exchange during the pendency of this appeal.”
Luana Lopes Lara, the founder of Kalshi, wrote in a post on X that she was “so grateful” for the ruling.
The company’s CEO, Tarek Mansour, also issued a statement celebrating the ruling.
“We are incredibly honored to bring safe, regulated, and trusted election markets to the US,” Mansour said. “This week is the dawn of a new era for financial markets.”
The Independent has requested comment for the CFTC.
Despite the legal questions surrounding the contracts, betters have already tossed hundreds of millions into the market predicting the outcome of the upcoming election. The markets were temporarily frozen while the appeals court made its decision.
This may just be the start of political betting on Kalshi’s platform; the company has reportedly said it hopes to expand its markets to include other political showdowns, including the US presidential election, according to Politico.
