On Thursday, Sept. 12, Kalshi launched its congressional control markets after a court victory that morning. Later that day, Kalshi paused trading on its election markets “pending court process.”
The CFTC filed an appeal for an emergency stay while the D.C. Circuit Court considered whether to allow Kalshi’s election markets. The D.C. Circuit Court granted the CFTC’s request for a stay.
It’s a swift reversal in a closely-watched case within the prediction industry.
Court Battles Led to About Half a Day of Legal Election Betting
The morning of Sept. 12, the CFTC lost its final bid to get a stay from D.C. District Judge, Julia Cobb. Near the end of her opinion, Judge Cobb wrote:
“Kalshi’s event contracts ask buyers to take a yes/no position on whether a chamber of Congress will be controlled by a specific party in a given term. That question involves…elections, politics, Congress, and party control; but nothing that any Party to this litigation has identified as illegal or unlawful activity. Nor does that question bear any relation to any game—played for stakes or otherwise. Accordingly, the Court concludes that Kalshi’s congressional control contracts do not involve unlawful activity or gaming.”
However, the appeals court ruled that Kalshi must wait to offer its election markets until a decision is made on a stay pending appeal. The Circuit Court could decide whether the new administrative stay will be lifted in the coming week or whether it will remain in place until the appeals process is completed.
Kalshi’s filing opposed the CFTC’s new administrative stay and urged the Circuit Court to rule quickly. Kalshi’s council wrote:
“If this Court is nevertheless inclined to enter an administrative stay pending consideration of the CFTC’s motion for a stay pending appeal, such a stay should be as brief as possible, to minimize the serious harms that will flow from staying the District Court’s ruling, pausing trading on contracts that have already been listed,1 and allowing the CFTC’s unlawful order to remain in effect.”
