Topline
A federal appeals court Wednesday lifted an earlier ruling that blocked Americans from betting on the outcome of congressional elections, following challenges from regulators, which claimed the bets could harm the integrity of U.S. elections.
Regulators argued bets could harm the integrity of U.S. elections.
Key Facts
The U.S. Court of Appeals for the District of Columbia ruled unanimously Tuesday the prediction market Kalshi could allow users to bet on which political party would control the House or Senate in 2025.
The ruling lifts a block issued by the court last month after the Commodity Futures Trading Commission motioned to prohibit the bets, arguing betting on congressional elections would “threaten election integrity” by creating incentives for voters to support specific candidates.
The CFTC failed to provide sufficient evidence indicating the “publicly will be irreparably injured,” the court ruled, adding the agency could renew a bid to block the bets “should substantiating evidence arise.”
Neither the CFTC nor Kalshi immediately responded to requests for comment.
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What To Watch For
A Kalshi spokesperson told CoinDesk the company would allow betting on election outcomes “very soon,” though it did not provide a timetable.
Key Background
The CFTC has challenged efforts for betting markets in the U.S. to allow wagers on congressional elections for years. The agency has refused to grant gambling platforms a license to provide odds on election results, though some international markets—including Polymarket and PredictIt—provide odds and allow users to wager. Betting on elections is not illegal at the federal level, though it is outlawed in some states, including Texas and Nevada. Kalshi, a New York-based predictions market, was sued by the CFTC in November 2023 over its betting offerings for Senate and House election results. Kalshi then sued the CFTC while seeking to overturn the agency’s decision preventing it from allowing those bets. A lower court ruled in favor of Kalshi on Sept. 6, a decision that was supported by the U.S. Court of Appeals a week later, briefly allowing Kalshi to offer congressional wagers before the block was put in place.
Surprising Fact
Kalshi users were allowed to bet on congressional election outcomes for about eight hours before the appeals court blocked those wagers, according to the Associated Press. During that period, users could pay a minimum of 76 cents to bet on Republicans winning the Senate and 63 cents on the Democrats winning the House. A $100 wager on either bet would have profited $29 and $54, respectively.
