Kalshi Drops Its Appeal Against the CFTC, Finally Clearing the Way for the Platform to Offer Political Event Contracts

The U.S. Commodity Futures Trading Commission (CFTC) has dropped its appeal in its case against Kalshi, the New York-based prediction market, over the launch of political event contracts, according to a Monday court filing.

The conditions of the motion for voluntary dismissal, which is still subject to court approval, are that both parties will bear their own legal costs and Kalshi (pronounced "Kal-key") will waive any right to sue the CFTC for this litigation.

“Today is historic. We have always believed that doing things the right way, no matter how hard, no matter how painful, pays off. This result is proof of that,” Kalshi CEO Tarek Mansour said in a statement.

“Kalshi's approach has officially and definitively secured the future of prediction markets in America.”

Kalshi’s fight with the CFTC began earlier this year when the regulator turned down Kalshi’s plan to let users bet on which party would control the chambers of Congress.

At the time of the denial, the CFTC — then under the leadership of former Chair Rostin Behnam — claimed that such contracts involved unlawful gaming and were “contrary to the public interest.”

But Kalshi sued the CFTC in March, claiming that the agency had overstepped its authority in attempting to block the contracts, and a judge sided with Kalshi in September, clearing the way for the platform to list the political contracts.

Immediately after losing the case, the CFTC scrambled to undo the district judge’s decision. The agency applied for a 14-day stay of the order — basically, a two-week delay on Kalshi’s ability to list the contracts while the CFTC prepared for an appeal — and was denied.

Then, in November, the agency filed an appeal, largely arguing that the lower court had erred in its analysis of the agency’s statutory authority to approve or deny Kalshi’s applications for the new markets.

However, shortly after oral arguments in early January, U.S. President Donald Trump returned to office. His eldest son, Don Jr., joined Kalshi as a strategic advisor on January 13.

And Rob Schwartz, the CFTC’s general counsel at the time the appeal was filed, left the agency in April after withdrawing from the case in March.

After taking over as acting chair of the CFTC in December 2023, Caroline Pham has shifted the agency’s approach to crypto, slashing several pieces of crypto-related guidance and narrowing down its once-wide variety of enforcement task forces down to just two, in an effort to simplify its regulation and enforcement of the crypto industry.