- CFTC seeks court approval to dismiss its appeal against prediction market Kalshi, potentially allowing the platform to list political event contracts.
- Both parties agreed that Kalshi will cover its legal costs if the court grants the dismissal.
- The move follows a change in leadership at the regulator and signals a departure from the previous stance on political betting markets.
The U.S. Commodity Futures Trading Commission (CFTC) has requested court permission to withdraw its appeal in a case involving prediction market platform Kalshi. This action could enable Kalshi to offer contracts on political events, such as elections, without further regulatory dispute.
On May 5, attorneys for the CFTC submitted an unopposed motion for voluntary dismissal to the U.S. Court of Appeals for the District of Columbia Circuit, according to the filing posted on Courtlistener. The document indicates a mutual agreement between the commission and Kalshi, with final decision pending court approval.
In their joint filing, Kalshi agreed to “bear its own costs, court fees and attorney fees incurred” if the motion is granted. Following the court filing, Kalshi posted on social media, stating, “election markets are here to stay”, as noted in a May 6 update on X.
Kalshi originally filed suit against the CFTC in 2023 after the agency ordered it to stop offering political event contracts. The platform prevailed in a lower court, prompting the commission’s appeal in September 2024.
The case has gained attention following shifts in the agency’s leadership. Current acting chair Caroline Pham was appointed under President Donald Trump, while Commissioner Summer Mersinger, a nominee of former President Joe Biden, echoed support for prediction markets in February, stating that “election prediction markets were ‘here to stay.’”
Launched in 2021, Kalshi has drawn significant interest from cryptocurrency users, especially related to the 2024 U.S. election. While the CFTC previously argued that election betting could lead to market manipulation and public harm, its recent request to dismiss the appeal suggests a policy shift.
For reference, Kalshi also recently announced acceptance of Bitcoin deposits to appeal to crypto-native users. More background is available in statements included in the original court documents.
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