AUS
NZ
UK
CA
USA
IND
A recent court decision has allowed Kalshi, a prediction market platform, to offer derivatives for betting on the upcoming U.S. presidential election. This development follows a ruling by Judge Jia Cobb of the U.S. District Court for the District of Columbia, which overturned a prior order from the U.S. Commodity Futures Trading Commission (CFTC).
The CFTC had previously blocked Kalshi’s election derivatives, arguing that such contracts could undermine election integrity and that election-related gambling is prohibited in certain U.S. states. The judge’s decision, announced on September 7, 2024, marks a significant shift, permitting Kalshi to offer products that enable participants to wager on election outcomes. According to Kalshi co-founder and CEO Tarek Mansour, this ruling represents the first legalization of election markets in the U.S. in a century.
Jake Chervinsky, Chief Legal Officer at Variant Fund, described the ruling as a substantial victory for Kalshi. However, he indicated a desire to review the detailed judicial opinion before fully assessing the implications. Chervinsky suggested that this case illustrates the effectiveness of legal action in addressing regulatory challenges.
The CFTC retains the option to appeal the decision. The regulatory body’s earlier stance was that allowing election derivatives would jeopardize the electoral process and violate state laws on gambling.
In related developments, Kalshi had previously announced plans to launch prediction contracts related to cryptocurrency price movements, including {Bitcoin} (BTC) and {Ether} (ETH). These contracts are designed to allow users to speculate on the future prices of these digital assets.
Additionally, on August 8, 2024, crypto exchange Gemini urged the CFTC to withdraw a proposed regulation that would ban all event contracts on decentralized prediction markets. According to Gemini co-founder Cameron Winklevoss, this proposed rule could negatively impact platforms like Polymarket, which facilitate such trades.
