Pivotal victory
New York-based Kalshi has won another pivotal battle for prediction market providers after the Commodity Futures Trading Commission (CFTC) essentially gave the green light to election betting.
A Monday filing with the US Court of Appeals for the District of Columbia Circuit revealed the CFTC has requested permission to settle its legal battle with Kalshi over election betting.
A statement from Kalshi CEO Tarek Mansour revealed how big a victory the CFTC back-down is for the vertical. Mansour took to X to acclaim how his company’s election betting win solidifies prediction markets’ “right to exist and thrive”:
According to reports, Kalshi’s request for dismissal also “waives any and all claims relating to or arising from litigation of this matter before this Court, the district court, or administrative proceedings before the Commission”.
Winds of change
The action of the federal trade body opens the door to it doing the same for sports betting prediction markets.
While the CFTC went toe-to-toe with Kalshi in the Biden era during the 2024 presidential election, it emerged bloody-nosed and defeated, with the New York firm ultimately allowed to offer bets on the outcome. State gambling regulators in Nevada and New Jersey have also been laid out on the canvas by Kalshi recently over sports event betting, with the CFTC dismissing cease-and-desist orders.
While the CFTC reportedly gave no reason why it wanted to settle with Kalshi, industry insiders believe the body is dealing with the new reality of the likes of Kalshi, and is undergoing a fundamental reshuffle.
a commission that is now having to play chess with itself”
Prediction markets-savvy gaming attorney Andrew Kim stated on LinkedIn on Monday that the CFTC’s request to settle with Kalshi: “could be indicative of a commission that is now having to play chess with itself as it determines next steps.”
Kim posed that if the feds had beaten Kalshi in court over election betting it would have been “a headache, if not an obstacle, for an agency reassessing its views on prediction markets.”
Further questions
Public signs of an agency in flux emerged in late April after the CFTC abruptly canceled a prediction markets roundtable without explaining why or setting a future date.
Further indications of internal machinations came Monday, with the CFTC announcing it was taking disciplinary action against some of its workforce.
“Pursuant to the President’s executive orders on lawful governance and accountability, the CFTC has placed staff on administrative leave for potential violations of laws, government ethics requirements and professional rules of conduct.”
