A federal appellate panel will decide if Kashi’s product offering ‘predictive event contracts’ on 2024 U.S. elections is a commodity market.
A legal battle over the future of a website’s election prediction market is set to continue on Sept. 19, when an appeals court hears the case of Kalshi v. CFTC, a decision that could reshape how Americans engage in political discourse.
The three-judge U.S. Court of Appeals for the District of Columbia Circuit will be considering whether individuals should be permitted to purchase contracts to participate in predictive markets that trade on the outcome of elections. If so, should these markets be regulated like other financial exchanges and commodity markets or as a form of gambling?
New York-based KalshiEx LLC argues that the elections market section of its website is a derivatives trading platform where participants buy and sell contracts based on projected outcomes of events, such as elections, and should be regulated no differently than grain futures that investors purchase as hedges against price fluctuations.
These markets provide a “public benefit” by gauging public sentiment in real-time, Kalshi maintains, a valuable guide for policymakers, politicians, and pundits in charting the public pulse.
The Commodity Futures Trading Commission (CFTC), which regulates the