Kalshi Wins In U.S. Court Of Appeals, Posts Markets For Congress

The prediction market Kalshi won a major victory in the U.S. Court of Appeals Wednesday, paving the way for people to wager on who will control Congress after the Nov. 5 election — as well, it would appear, on any other election markets Kalshi sees fit to post.

The court denied a motion by the Commodity Futures Trading Commission (CFTC) to halt contracts — i.e., bets — on which party will control Congress pending the CFTC’s appeal of the case it lost to Kalshi last month.

The CFTC argued these contracts amounted to illegal gambling, but a lower court ruled against the CFTC.

The Appeals Court ruling allows Kalshi to offer the congressional market, and, it would seem, any other political market it sees fit to offer, including the race for the presidency between current Vice President Kamala Harris and former President Donald Trump.

Markets were trickling in on Kalshi late afternoon Wednesday, with Republicans as a 75% favorite to win the Senate, and Democrats a 63% favorite to win the House.

No ‘irreparable harm’

In the ruling, the appeals court found the CFTC failed to demonstrate irreparable harm would occur without a stay, which is necessary for granting a stay.

“A stay pending appeal is an ‘extraordinary’ remedy,” wrote Circuit Judge Patricia Millett. She added, “In short, the concerns voiced by the Commission are understandable given the uncertain effects that Congressional Control Contracts will have on our elections, which are the very linchpin of our democracy. But whether the statutory text allows the Commission to bar such event contracts is debatable, and the Commission has not substantiated that risks to election integrity are likely to materialize if Kalshi is allowed to operate its exchange during the pendency of this appeal. At this point, in other words, the Commission has failed to make the essential showing of irreparable harm.”

Furthermore, the CFTC’s concerns about election integrity and market manipulation were deemed speculative rather than certain and imminent threats.

The court noted a lack of evidence that existing unregulated election betting markets — such as the ones found at PredictIt and Polymarket — have caused the harms the CFTC fears.

“Ensuring the integrity of elections and avoiding improper interference and misinformation are undoubtedly paramount public interests, and a substantiated risk of distorting the electoral process would amount to irreparable harm,” Millett wrote. “The problem is that the Commission has given this court no concrete basis to conclude that event contracts would likely be a vehicle for such harms.”

The ruling leaves open the possibility for the CFTC to renew its stay request if more concrete evidence of harm emerges.

Back on Sept. 13, Kalshi won its case against the CFTC and posted the congressional odds, but was forced to take them down hours later when the appeals court granted the temporary stay.