- A federal appeals court ruled that Americans can bet on the outcome of the 2024 congressional elections, rejecting the Commodity Futures Trading Commission’s (CFTC) effort to prohibit the commodities exchange KalshiEx from offering such bets.
- The court found that the CFTC failed to demonstrate that it or the public would be irreparably harmed by allowing the bets during the appeal process.
- The ruling clears the way for KalshiEx to offer contracts, potentially worth up to $100 million each, on which party will control the Senate and House of Representatives after the 2024 elections.
A federal appeals court in Washington DC cleared the way Wednesday for Americans to bet on the outcome of the 2024 congressional elections, rejecting an effort by regulators to block such wagers.
Appeals court rejects regulator bid to halt election betting
The appeals court decision rejected a bid by the federal Commodity Futures Trading Commission (CFTC) to prohibit the commodities exchange KalshiEx from offering Congressional Control Contracts while the agency appealed a lower court ruling.
That earlier ruling had given the green light for Americans to bet on which party will control the House and Senate after the 2024 elections.
The CFTC argues that such betting contracts might cast doubt on the integrity of elections. But the appeals court said the regulator failed to demonstrate irreparable harm that would justify blocking the contracts during its appeal.
Lower court overturned CFTC ban
The legal dispute began when the CFTC rejected KalshiEx’s application to offer congressional betting contracts, citing concerns about gambling and election integrity.
KalshiEx sued to overturn the CFTC ban. Judge Jia Cobb in US District Court in Washington DC ruled last month that the CFTC erred in finding the contracts involved illegal gambling.
Cobb’s ruling was quickly blocked at the regulator’s request. But Wednesday’s appeals court decision lifts that stay, allowing KalshiEx to accept bets for now.
Kalshi sees big demand for election betting
KalshiEx offers customers contracts that can hedge risks on events like elections. The co-founder suggested in a social media post that the exchange might offer contracts on the 2024 presidential race after the latest court victory.
The exchange would allow bets up to $100 million on each congressional contract. The CFTC remains concerned about potential manipulation, but the appeals court said it had not shown irreparable harm to justify blocking wagers amid its appeal.
Unclear if CFTC will take further action
The CFTC said the ruling was on its request for an emergency stay, not the broader appeal. It’s unclear if the regulator will take further legal action to halt KalshiEx’s election betting.
For now, the latest court decision opens the door for Americans to bet on which party will control Congress after 2024. KalshiEx is accepting wagers while the CFTC appeal plays out.
