US court may overturn ban on betting on elections
A court could overturn a ban that would allow Americans to legally bet on the US elections. A federal judge in the District of Columbia has sided with predictive market company Kalshi against the Commodity Futures Trading Commission (CFTC).
In 2023, the CFTC denied the New York-based firm’s request to allow its customers to bet on Congressional outcomes. The predictive marketing platform believes that with thousands or millions of participants, prevailing projections wind up being far more reliable reflections of final outcomes.
Why is the CFTC opposed to political betting?The CFTC and other opponents to betting on electoral politics fear the risks of even more money flowing into the US political system and the elections. However, on Friday (September 6), District Court Judge Jia Cobb ruled in favor of Kalshi, but did not give her reasoning, which she said she would spell out in a subsequent opinion. She has not revealed when this will be published.
Following the decision, Kalshi declared on its website: “We did it! US election markets are coming to Kalshi.” The company’s founder, Tarek Mansour, wrote on X: “For the first time in 100 years, Americans will have access to legal election markets at scale. Historic moment for financial markets.”
Kalshi just legalized trading on elections in the U.S.
For the first time in 100 years, Americans will have access to legal election markets at scale.
Historic moment for financial markets. pic.twitter.com/lIvQAPXYNJ
— Tarek Mansour (@mansourtarek_) September 9, 2024
The CFTC then filed an emergency motion asking Cobb to stay her order for 14 days following publication of the opinion. Without knowing her reasoning, the agency said, it can’t figure out whether it should appeal the decision.
Kalshi wrote in a court filing: “The commission lost, fair and square, on the law.
“It should not be allowed to snatch a procedural victory from the jaws of defeat by running out the clock” until the Congressional elections happen this fall.”
Cited by the Wall Street Journal, the CFTC had said in its emergency motion: “At a time when distrust in elections is at an all-time high, even a short listing of Plaintiff’s contracts…could harm public perception of election integrity and undermine confidence in elections.”
ReadWrite has reached out to Kalshi and the Commodity Futures Trading Commission for comment.
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