The U.S.
Commodity Futures Trading Commission (CFTC ) has moved to voluntarily dismiss
its appeal against Kalshi, effectively allowing the New York-based derivatives
trading platform to continue offering contracts that let Americans bet on
election outcomes.
In a filing
with the U.S. Court of Appeals for the D.C. Circuit on Monday, the CFTC
requested to drop its appeal following a 3–0 commission vote, with one
commissioner abstaining. The agreement stipulates that each party will bear its
own costs and fees, with KalshiEX LLC waiving all legal claims arising from the
litigation.
Tarek Mansour, the CEO and Co-Founder of Kalshi
“Today
is historic. We have always believed that doing things the right way, no matter
how hard, no matter how painful, pays off,” said Tarek Mansour, CEO and
co-founder of Kalshi, in a statement.
The
decision marks a significant development in the regulation of prediction
markets and event-based contracts in the United States. Kalshi currently offers
contracts on various political outcomes, including potential 2028 presidential
nominees and specific Senate races.
CFTC vs. Kalshi
The dispute
began
in June 2023 when Kalshi sought CFTC permission to list contracts allowing
Americans to bet on which party would control the House of Representatives and
Senate. The CFTC initially prohibited these contracts, citing concerns about
unlawful gaming and public interest issues.
CFTC moving to drop Kalshi suit is a BFD for #eventcontracts and #gaming
The Wild West gets even wilder
— Clay Reade Jacob Jr. (@Readejacob) May 5, 2025
Kalshi
responded by filing a lawsuit, arguing the CFTC had exceeded its authority. In
September, D.C. District Court Judge Jia Cobb ruled in Kalshi’s favor,
determining that Congress had not authorized the CFTC to conduct the public
interest review that led to the ban.
Although
the CFTC immediately appealed and secured a temporary stay, the appeals court
later lifted the freeze, allowing Kalshi to proceed with offering
election-related contracts while the appeal was pending.
“Betrayal of the Public
Interest”
The CFTC’s
decision to drop its appeal has drawn criticism from financial reform
advocates. Better Markets called the move “a stark betrayal of the public
interest,” arguing that allowing betting on election outcomes threatens
electoral integrity and could lead to market manipulation.
The agreement between the CFTC and Kalshi to dismiss the appeal is not binding on the DC Circuit. Appellate courts have denied stipulated motions to dismiss appeals that have been fully briefed and orally argued, especially when they involve issues of great importance.🧵
— Daniel Wallach (@WALLACHLEGAL) May 6, 2025
In January,
Kalshi named Donald Trump Jr. as a strategic advisor to the firm, further
highlighting the company’s connections to the political sphere as it expands
its prediction market offerings.
State
regulators have also stepped in. As reported by FinanceMagnates.com in
late March, Nevada—America’s gambling hub and a major revenue earner from Las
Vegas—has
raised concerns over Kalshi’s contracts.
Event Contracts to Become “Trillion
Dollar Asset Class”
Prediction
markets aren’t just about elections. Every day, thousands of users place bets
through Kalshi and its partner companies—including
retail trading giant Robinhood—on a wide range of future events. These
range from Bitcoin ’s end-of-session price and the release date of GTA 6, to the
outcomes of basketball games.
Starting today, you can now trade contracts on the men’s and women’s college basketball tournaments.
See you at tip-off: https://t.co/WXpUDpYBJO pic.twitter.com/fRF6xhr0Xd
— Robinhood (@RobinhoodApp) March 17, 2025
And as FinanceMagnates.com
has learned, these markets are attracting significant capital. In March this
year, Kalshi’s March Madness contracts on the NCAA basketball tournaments
recorded a record-breaking $200 million in trading volume.
Jack Such
of Kalshi, who oversees Business & Media Development, told
FinanceMagnates.com that prediction markets have shown “an
astronomical rate of growth.” In his view, event contracts “will become a
trillion-dollar asset class.”
The U.S.
Commodity Futures Trading Commission (CFTC ) has moved to voluntarily dismiss
its appeal against Kalshi, effectively allowing the New York-based derivatives
trading platform to continue offering contracts that let Americans bet on
election outcomes.
In a filing
with the U.S. Court of Appeals for the D.C. Circuit on Monday, the CFTC
requested to drop its appeal following a 3–0 commission vote, with one
commissioner abstaining. The agreement stipulates that each party will bear its
own costs and fees, with KalshiEX LLC waiving all legal claims arising from the
litigation.
Tarek Mansour, the CEO and Co-Founder of Kalshi
“Today
is historic. We have always believed that doing things the right way, no matter
how hard, no matter how painful, pays off,” said Tarek Mansour, CEO and
co-founder of Kalshi, in a statement.
The
decision marks a significant development in the regulation of prediction
markets and event-based contracts in the United States. Kalshi currently offers
contracts on various political outcomes, including potential 2028 presidential
nominees and specific Senate races.
CFTC vs. Kalshi
The dispute
began
in June 2023 when Kalshi sought CFTC permission to list contracts allowing
Americans to bet on which party would control the House of Representatives and
Senate. The CFTC initially prohibited these contracts, citing concerns about
unlawful gaming and public interest issues.
CFTC moving to drop Kalshi suit is a BFD for #eventcontracts and #gaming
The Wild West gets even wilder
— Clay Reade Jacob Jr. (@Readejacob) May 5, 2025
Kalshi
responded by filing a lawsuit, arguing the CFTC had exceeded its authority. In
September, D.C. District Court Judge Jia Cobb ruled in Kalshi’s favor,
determining that Congress had not authorized the CFTC to conduct the public
interest review that led to the ban.
Although
the CFTC immediately appealed and secured a temporary stay, the appeals court
later lifted the freeze, allowing Kalshi to proceed with offering
election-related contracts while the appeal was pending.
“Betrayal of the Public
Interest”
The CFTC’s
decision to drop its appeal has drawn criticism from financial reform
advocates. Better Markets called the move “a stark betrayal of the public
interest,” arguing that allowing betting on election outcomes threatens
electoral integrity and could lead to market manipulation.
The agreement between the CFTC and Kalshi to dismiss the appeal is not binding on the DC Circuit. Appellate courts have denied stipulated motions to dismiss appeals that have been fully briefed and orally argued, especially when they involve issues of great importance.🧵
— Daniel Wallach (@WALLACHLEGAL) May 6, 2025
In January,
Kalshi named Donald Trump Jr. as a strategic advisor to the firm, further
highlighting the company’s connections to the political sphere as it expands
its prediction market offerings.
State
regulators have also stepped in. As reported by FinanceMagnates.com in
late March, Nevada—America’s gambling hub and a major revenue earner from Las
Vegas—has
raised concerns over Kalshi’s contracts.
Event Contracts to Become “Trillion
Dollar Asset Class”
Prediction
markets aren’t just about elections. Every day, thousands of users place bets
through Kalshi and its partner companies—including
retail trading giant Robinhood—on a wide range of future events. These
range from Bitcoin ’s end-of-session price and the release date of GTA 6, to the
outcomes of basketball games.
Starting today, you can now trade contracts on the men’s and women’s college basketball tournaments.
See you at tip-off: https://t.co/WXpUDpYBJO pic.twitter.com/fRF6xhr0Xd
— Robinhood (@RobinhoodApp) March 17, 2025
And as FinanceMagnates.com
has learned, these markets are attracting significant capital. In March this
year, Kalshi’s March Madness contracts on the NCAA basketball tournaments
recorded a record-breaking $200 million in trading volume.
Jack Such
of Kalshi, who oversees Business & Media Development, told
FinanceMagnates.com that prediction markets have shown “an
astronomical rate of growth.” In his view, event contracts “will become a
trillion-dollar asset class.”
