CFTC Withdraws Appeal in Kalshi Election Betting Case
Last year, the CFTC appealed a federal judge's ruling that allowed Kalshi to enter the political prediction market, arguing that it was causing “serious” harm to the public.
Cheyenne Ligon | Edited by Nikhilesh De May 6, 2025 6:14 PM
What you need to know:
- The CFTC has withdrawn its appeal against Kalshi, allowing the platform to offer contracts on political events.
- The lawsuit between Kalshi and the CFTC began in 2023 over the denial of contracts related to congressional oversight.
- Under the leadership of Acting Chair Caroline Pham, the CFTC has changed its regulatory strategy to make it easier to enforce cryptocurrency laws.
The U.S. Commodity Futures Trading Commission (CFTC) has dropped its appeal against New York-based prediction market Kalshi, a lawsuit filed Monday revealed, finally clearing the way for the platform to offer contracts on political events.
Under the terms of the voluntary withdrawal motion, which must still be approved by the court, both parties will cover their own legal costs, and Kalshi waives any rights to sue the CFTC in the matter.
“Today is a historic moment. We have always believed that doing the right thing, no matter how difficult or painful, ultimately pays off. This result is proof of that,” said Kalshi CEO Tarek Mansour. “Kalshi’s approach has officially and definitively secured the future of prediction markets in America.”
Kalshi’s run-in with the CFTC began in 2023, when the regulator rejected the company’s proposal to allow users to bet on which party would control the houses of Congress. In its rebuttal, the CFTC — then under former Chairman Rostin Behnam — argued that such contracts involved illegal gambling and were “contrary to the public interest.”
In November of that year, Kalshi filed a lawsuit against the CFTC in Washington, D.C., arguing that the regulator had overstepped its authority in attempting to block the contracts and asking a judge to overturn the decision. In September 2024, the court sided with Kalshi, clearing the way for the platform to list political contracts.
After losing the case, the CFTC tried to appeal the district judge’s decision. It filed a motion for a 14-day stay of the order—effectively a two-week delay in Kalshi’s ability to list the contracts while the CFTC prepared to appeal—but it was denied. It then filed an appeal, repeating many of the same arguments as the original defense.
However, shortly after oral arguments in early January, US President Donald Trump returned to office. His eldest son Don Jr. joined Kalshi as a strategic adviser on January 13. Rob Schwartz, the CFTC's legal counsel at the time of the appeal, left the agency in April after withdrawing from the case in March.
Under Acting Chair Caroline Pham, the agency has changed its approach to cryptocurrencies, cutting some sections of its crypto-related guidance and narrowing its once-wide enforcement task force to two in an effort to simplify crypto regulation and compliance.
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