The U.S. CFTC warns that election betting is about to explode and seeks court extension of suspension of Kalshi's political prediction market
The U.S. CFTC warned that "election betting is about to explode" and asked the appeals court to extend the suspension of Kalshi's political prediction market. "The district court's order was interpreted by Kalshi and others as an open season for election betting," the CFTC said in a filing on Saturday.
Recently, Jia Cobb, a federal judge in the District of Columbia, issued a formal opinion, ruling that the CFTC had no authority to conduct a "public interest review" to prevent Kalshi from listing a political prediction market in the United States. Judge Cobb pointed out that Kalshi's contracts did not involve illegal activities or gambling, but about elections, neither of which fell within the jurisdiction of the CFTC. Currently, the U.S. Congress has revoked the CFTC's public review of certain proposed futures contracts, saying that unless these contracts fall into specific categories such as terrorism or gambling.
The CFTC noted that following the decision, Interactive Brokers, a heavyweight Wall Street broker, announced that it would offer contracts on the presidential election through a CFTC-regulated subsidiary. The agency said that unless the U.S. Court of Appeals for the District of Columbia extends the suspension of Kalshi contracts during the appeal, other CFTC-regulated exchanges will follow suit. "A surge in election betting on U.S. futures exchanges would harm the public interest," the CFTC reiterated, citing harms including market manipulation and "harm to election integrity."
