US Election Betting Back With Kalshi After Stay Denied


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Kalshi is back in the election betting game after a federal appeals court denied an emergency stay on the markets.

A three-judge panel from the DC Court of Appeals announced Wednesday that the Commodity Futures Trading Commission (CFTC) did not make the case for irreparable harm that could come from Kalshi offering political markets.

Kalshi had some political markets back up on Wednesday and launched its election betting on Thursday.

Is election betting here for good?

Kalshi founder Tarek Mansour celebrated on Twitter after the opinion was released: “US presidential election markets are legal. Officially. Finally.”

That is not entirely true just yet, but the markets will likely remain available for this election. The full case still needs to be heard after the CFTC appealed the the DC Circuit Court‘s ruling to allow the markets.

The CFTC asked for an expedited schedule for the court to hear the case that would put oral arguments during the week of Dec. 2, or nearly a month after the country votes on Nov. 5.

The motion to stay was also dismissed without prejudice, meaning the CFTC could try again.

Irreparable harm ‘not out of reach’

Mansour’s victory lap could be short-lived if the CFTC can better prove its case. The opinion rules without prejudice and says showing there could be irreparable harm if Kalshi offers these markets is “not out of reach.”

“For example, political campaigns or their proxies encouraging supporters to purchase Congressional Control Contracts could constitute evidence that the contracts harm election integrity or that manipulation is underway,” the opinion reads. “Foreign investors bypassing Kalshi’s restrictions on foreign traders, just as Kalshi claims U.S. investors are doing on Polymarket, could substantiate the Commission’s concerns about harmful interference.

“Or evidence emerging that election-contract markets confuse American voters about the strength or viability of certain candidates might also satisfy the Commission’s burden. Other evidence of harms could also emerge.”

Election betting concerns ‘understandable’

Circuit Judge Patricia Millet penned the opinion that said while it is “understandable” to have concerns over the prospect of betting money on an election, the CFTC failed to “make the essential showing of irreparable harm.”

“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,” the opinion reads.

“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.”

CFTC argued concerns ‘not a hypothetical’

The two sides presented their cases to the panel Sept. 19. Both sides had 15 minutes to speak, though the hearing wound up lasting two hours and 40 minutes.

The CFTC noted 600 comment letters it received over the concern that political markets could undermine elections.

“If [Kalshi can offer election betting], the harm to the public is going to be profound at a time, and I don’t mean to be dramatic, but Americans broadly believe that our democracy is under threat before this court even has an opportunity to consider the issues, to fully consider the issues anyway,” CFTC attorney Rob Schwartz said.

Photo by AP/Charlie Neibergall