U.S. Appellate Court Allows Kalshi to Resume Election Betting
Date: 2024-10-03 Author: Leon Pierce Categories: EVENTS
For the past year, Kalshi, a regulated exchange and prediction market based in New York, has been locked in a legal battle with the Commodity Futures Trading Commission (CFTC). But this week, the U.S. Circuit Court of Appeals surprisingly sided with Kalshi, affirming a lower court’s ruling.
Ensuring Election Integrity Is of the utmost importance
The landmark ruling allows Kalshi to offer so-called “event contracts” for the country’s upcoming presidential election, giving the company the right to allow Americans to bet on the outcome of the November 5, 2024 election.
A major factor in the court’s decision was the CFTC’s failure to demonstrate how event contracts could harm public opinion, something the organization had argued throughout the lawsuit. The commission also said it would be affected if Kalshi began offering such contracts. However, the appeals court said the CFTC had not presented sufficient facts to substantiate its claims.
In its decision, the court emphasized the importance of ensuring the integrity of the upcoming elections and combating disinformation. The court also acknowledged that such risks could threaten the electoral process and cause significant harm.
“Ensuring the integrity of elections and preventing improper interference and disinformation are clearly important public interests. The existing risk of distortion of the electoral process could indeed cause irreparable harm. The problem is that the CFTC has not provided this court with any specific basis for concluding that event contracts could be a means of such harm,” the appeals court said in its recent decision.
Kalshi Scores a Significant Victory
The court’s decision thus clears the way for Kalshi to offer contracts on political events ahead of the presidential election. This decision comes as the CFTC appealed a previous lower court ruling that had sided with Kalshi.
Between the lower court ruling and the appeal, the company was only allowed to offer bets on elections for a few hours. However, after the appeal, a temporary injunction was issued preventing such activity.
Nevertheless, this new ruling is clearly a significant win for Kalshi. Moreover, the decision could serve as a blueprint for other companies looking to offer similar event contracts, paving the way for future expansion.
