The U.S. Capitol building is seen bellow a stormy sky on July 22, 2024 in Washington, DC.
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A federal appeals court in Washington, D.C., on Wednesday cleared the way for Americans to bet on the outcome of the 2024 congressional elections.
The appeals court rejected an effort by the Commodity Futures Trading Commission to prohibit the commodities exchange KalshiEx from offering “Congressional Control Contracts” while the CFTC appealed a lower court’s ruling that gave a green light for such bets.
The CFTC “has failed to at this time to demonstrate that it or the public will be irreparably injured” without a stay on the contracts being offered during the appeal, wrote Judge Patricia Millett of the U.S. Appeals Court for the District of Columbia Circuit.
Millett, who was part of a three-judge panel hearing the case, said the agency could renew its bid to block the contracts “should substantiating evidence arise.”
There were no dissents on Wednesday’s decision.
The CFTC had barred KalshiEx from listing its congressional contracts on the exchange, which the commission regulates, on the ground that they would violate the laws of many states that ban gambling on elections.
This illustration photo shows money and gambling dice in front of a screen showing political market odds, in Los Angeles on November 1, 2023.
Chris Delmas | Afp | Getty Images
But Judge Jia Cobb in U.S. District Court in Washington, D.C., ruled last month that the the regulator had erred in finding that KalshiEx’s congressional contracts involved gaming or gambling.
Cobb’s ruling was in effect for only about eight hours before the D.C. appeals court stayed it at the request of the CFTC.
But KalshiEx had accepted an unknown number of bets on the congressional elections during that time. The bets offered included ones on the outcome of Republicans winning control of the Senate and Democrats winning control of the House of Representatives.
That administrative stay was lifted in Wednesday’s ruling.
CNBC has requested comment from the CFTC and KalshiEx.
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