CFTC asks for settlement in Kalshi political wagering suit
The two have been in a legal dispute since the 2024 election.
Key Points
- The CFTC did not explain its reasons for requesting a settlement
- A settlement could result in continued growth in a political wagering market
The Commodity Futures Trading Commission (CFTC) has requested authorization to settle its legal dispute with Kalshi, according to a Bloomberg news report.
The CFTC did not elaborate on its recent for possible case dismissal. The agency recently filed the request with the US Court of Appeals for the District of Columbia Circuit.
Kalshi’s recent lawsuit against the CFTC claimed the commission “wrongfully denied its application to launch a market for derivatives tied to results of congressional elections.”
The suit resulted from a recent decision made by CFTC to reject Kalshi’s proposal, which would have allowed some traders to place wagers for up to $100m on the outcome of elections. The proposal raised concerns regarding potential election interference.
The CFTC determined that US investors cannot directly bet on the outcome of the 2024 Congressional elections. The organization ruled that contracts “involving gaming and activity that is unlawful under state law and are contrary to the public interest.”
If the settlement is approved, this could springboard growth in political prediction markets, a form a wagering that gained traction during the 2024 US presidential elections, according to the Bloomberg report.
In related news, Kalshi recently filed a temporary restraining order and preliminary injunction against the Maryland Lottery and Gaming Control Commission (MLGCC), following a recently issued cease-and-desist order.
This is the latest in a series of legal suits against state regulators. Kalshi alleges the MLGCC is “unconstitutionally threatening to prohibit trading of Plaintiff KalshiEX LLC’s (Kalshi) sports-event contracts in Maryland.”
The Maryland regulator sent the letter earlier in the month, claiming Kalshi does not hold proper licensing in the state to conduct activities.
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