KALSHI WINS — COURT SLAMS CFTC FOR BLOCKING ELECTION BETS
The D.C. Circuit handed KalshiEx a decisive victory, lifting the CFTC’s ban on prediction market contracts tied to election outcomes. The ruling keeps live trading open while the agency’s appeal plays out, marking a direct challenge to regulators’ authority over what counts as a gaming or event contract. For crypto traders, it signals that courts may be willing to push back against broad agency power grabs before tokens feel the heat.
The lawsuit began when KalshiEx asked the CFTC for permission to list contracts on congressional control and presidential winners. The agency said no, claiming these were illegal gaming contracts under the Commodity Exchange Act. Kalshi sued in district court and won an order letting the markets run. The CFTC appealed and asked the appeals court to freeze that order until a full hearing. On October 2, the D.C. Circuit refused the emergency stay, allowing the markets to stay open and showing the agency had not likely proven its own legal position.
Judges focused on the core legal question: whether election results constitute a “game of chance” the CFTC can outright ban. They ruled that the agency’s definition was too broad and that Kalshi’s contracts more closely resembled legitimate financial instruments than gambling. The decision gives Kalshi and similar platforms immediate relief, meaning election contracts can continue trading and other platforms may follow suit. The CFTC loses ground on its claim that the agency alone decides what events are permissible, rather than courts or Congress.
In plain English, the court told the CFTC that es