Kalshi launches election markets as CFTC turns to appellate court

Kalshi founder Tarek Mansour said Thursday marked the “the first trade on regulated election markets in nearly a century”

article-image

Mark Van Scyoc/Shutterstock modified by Blockworks

share

After a court battle with the Commodity Futures Trading Commission — which isn’t quite over yet — Kalshi launched prediction markets for the upcoming US election.

The launch comes after the CFTC was denied another emergency stay by Judge Jia Cobb, who oversaw the case.

In a hearing early Thursday, Judge Cobb sided with Kalshi again. She told the CFTC she wouldn’t grant a stay, citing arguments made by Kalshi’s attorneys. 

CFTC attorneys, during the hearing, argued the contracts could pose a “public interest risk.” With the election just a few months out, Kalshi attorneys made a case that waiting any further to launch the markets could cause the company potential economic harm.

Read more: How prediction markets are bracing for post-election user drop-offs

The CFTC was previously granted a stay last week as it asked the judge to reconsider her order. 

In an opinion on Thursday, Cobb wrote, “Court finds that Kalshi’s congressional control contracts do not involve activity that is unlawful under any federal or state law, nor do they involve gaming.”

“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 (relates to, entails, has as its essential feature or any other iteration of the word) elections, politics, Congress and party control; but nothing that any party to this litigation has identified as illegal or unlawful activity,” she noted.

Tarek Mansour, Kalshi’s founder, said that Thursday marked the “the first trade on regulated election markets in nearly a century.”

Loading Tweet..

Kalshi’s currently the only legal prediction market in the US. Polymarket, which has quickly become a good gauge for overall sentiment, doesn’t operate in the US. 

Polymarket settled with the CFTC back in 2022, which saw the prediction market pay out $1.4 million for allegedly operating an unregistered platform for trading options contracts. As part of the settlement, Polymarket agreed to ban US users without admitting or denying wrongdoing. 

Read more: Unpacking a potential Polymarket ‘ban’

The popular prediction market also came up a few times in Thursday’s hearing, with Kalshi’s lawyers noting that Kalshi being blocked from allowing election markets would just push people to an “unregulated” market such as Polymarket. 

The CFTC wants the appeals court to grant an emergency stay for two weeks to prevent the markets from being active as lawyers draw up an appeal. At the Thursday hearing, attorneys for the CFTC warned about potential risks to election integrity. 

Updated September 12, 2024 at 5:24 pm ET: Tightened headline for clarity.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research

article-image

Should higher-fidelity graphics be the goal for crypto games — which result in much higher costs and risk?

article-image

From Mel B to Neil deGrasse Tyson, BTC has seen its share of strange celebrity sightings

article-image

Circle’s roadshow will be the real test for the stablecoin issuer

article-image

PitchBook’s Robert Le said crypto projects focused on institutional use cases are the focus

article-image

The decentralized AI firm designed ODS to be owned by the community in an effort to promote more decentralized AI

article-image

The non-profit’s launch and big-name hires aim to grow Solana’s footprint in Washington