Appeals Court Allows Kalshi to Resume US Election Bets

The US Court of Appeals for the District of Columbia Circuit lifted a temporary freeze that had prevented Kalshi from offering election betting markets in the United States on Wednesday, opening the door to allowing the company to once again offer wagers on American elections.

The appeals court had previously placed a temporary freeze on the Kalshi markets. On Wednesday, it rejected an emergency bid from the Commodity Futures Trading Commission (CFTC) to completely halt trading on the election markets until a full appeal on the case was heard. 

Kalshi Stands Out as Regulated Election Markets Platform

That left a lower-court decision that found in favor of Kalshi back in effect. Kalshi had been attempting to offer a market on whether Democrats or Republicans would control the two chambers of Congress after the 2024 elections. However, the company could potentially offer many more markets, including some on the presidential election.

“We are incredibly honored to bring safe, regulated, and trusted election markets to the US,” Kalshi CEO Tarek Mansour said in a statement following the ruling. “This week is the dawn of a new era for financial markets.”

The regulated nature of any markets on Kalshi is what will allow them to stand out from their competitors in the election prediction betting industry. Under CFTC regulation, Kalshi will be able to take up to $100 million in bets on its election markets.

Sites such as Polymarket allow for very large bets as well. But because it is not regulated in the United States, it doesn’t knowingly allow Americans to purchase contracts – though many users appear to get around these restrictions via the use of VPNs and other techniques. Meanwhile, sites like PredictIt are currently legal as academic prediction markets, but only allow users to own hundreds of dollars of contracts on any given market. 

Election Markets Live on Wednesday Afternoon

As of 3 pm Eastern on Wednesday, a limited number of American political markets were available on Kalshi. A Senate control market gave Republicans an approximately 75 percent chance of controlling the chamber after the 2024 elections, while Democrats were being traded as having a 63 percent chance of winning the House. 

The CTFC argued that election betting markets violate federal and state laws, and could also threaten the integrity of elections. However, while judges noted that these were legitimate concerns, they didn’t feel it was enough to restrict Kalshi’s ability to offer such markets while the appeals process plays out. 

“Ensuring the integrity of elections and avoiding improper interference and misinformation are undoubtedly paramount public interests,” Judge Patricia Millett wrote. “The problem is that the Commission has given this court no concrete basis to conclude that event contracts would likely be a vehicle for such harms.”

The CFTC declined to comment on the ruling, according to multiple media outlets. While the CFTC could still emerge victorious on appeal, the case won’t be decided until well after the 2024 election has ended, effectively allowing Kalshi free reign to offer election markets this year.

(Image: DA Cameron / Alamy)