Prediction market platform Kalshi launched its first U.S. election betting pool Thursday following a federal court win against the U.S. Commodity Futures Trading Commission (CFTC), which has appealed the decision in an attempt to stymie gambling on election outcomes.
“Today marks the first trade on regulated election markets in nearly a century,” Kalshi founder Tarek Mansour tweeted Thursday. “This one is for you, the prediction markets community.”
The CFTC’s appeal, filed Thursday in the U.S. District Court for the District of Columbia, marked federal regulators’ latest attempt to block the legal and regulator prediction market firm from operating political betting pools linked to the 2024 U.S. general election’s outcomes.
The regulator has for years made various moves to obstruct the New York-based startup’s plans to offer U.S. elections-based prediction markets due to their potential to “undermine” the “integrity” or “perception… of integrity” of the upcoming U.S. elections, according to the agency’s lawyers.
The first election market is live on @Kalshi.
Today marks the first trade on regulated election markets in nearly a century.
This one is for you, the prediction markets community. pic.twitter.com/USzzVMffQn
— Tarek Mansour (@mansourtarek_) September 12, 2024
“This is a very serious public interest threat. We can easily imagine this playing out in the form of misinformation,” CFTC lawyers said Thursday in a court hearing.
U.S. District Judge Jia Cobb ruled in favor of the startup earlier on Thursday, however. In her ruling, Judge Cobb criticized the CFTC’s efforts to conduct a public interest review of Kalshi’s election-based prediction markets plans, which would prevent the startup’s betting pools from going live before this election cycle. She argued that the CFTC was overextending its authority over the matter.
“Kalshi’s contracts do not involve unlawful activity or gaming. They involve elections, which are neither,” Judge Cobb said early Thursday in a memorandum opinion.
Following the decision Thursday, Kalshi launched a betting pool tied to whether Democrats or Republicans will win control of the Senate with the election, as well as a similar one for the House of Representatives.
The decision is the latest major development in an ongoing lawsuit between Kalshi and the CFTC.
Kalshi first sued the CFTC in November 2023, shortly after federal regulators told the startup it could not offer contracts settled based on which political party would control each chamber of the United States Congress.
Judge Cobb’s ruling marks a decisive blow to federal regulators’ efforts to prevent betting on the U.S. elections less than two months before Americans hit the polls.
and… WE’RE LIVE!!!
Thank you to everyone for the prayers and good energy all these years, now let’s do this 💪🏻💪🏻💪🏻 https://t.co/sjVjsXvODv
— Luana Lopes Lara (@luanalopeslara) September 12, 2024
Kalshi did not immediately reply to Decrypt’s request for comment. Kalshi co-founder Luana Lopes Lara celebrated the ruling on Thursday in a post on X. “WE’RE LIVE,” she wrote.
The CFTC did not immediately respond to Decrypt’s request for comment on the matter.
Kalshi has had ample time to prepare for this moment. The firm, founded in 2018, has been aspiring to offer U.S. elections-based betting since at least 2022, when the CFTC obstructed the firm’s efforts to offer prediction markets on the U.S. midterms’ elections.
Edited by Andrew Hayward
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Source: https://decrypt.co/249204/kalshi-us-election-prediction-markets-go-live-cftc-seeks-appeal
