Share this article
CFTC Denies Kalshi’s Plan to Let Users Bet on Control of U.S. Congress
U.S. federal regulators said the plans weren't in the "public interest," after a court squabble involving rival service PredictIt
Updated Sep 22, 2023, 5:50 p.m. Published Sep 22, 2023, 1:11 p.m.
Make us preferred on Google
Plans by prediction market Kalshi to let users bet on which party will control the chambers of Congress have been turned down by regulators at the Commodity Futures Trading Commission (CFTC).
The regulator said the contracts would involve unlawful gaming and activity and would be "contrary to the public interest" after KalshiEx LLC made a submission in June 2023.
STORY CONTINUES BELOW
The contracts would have been settled in cash and let users bet on yes or no questions about whether the Republicans or Democrats would control the House and Senate in a given term.
Last year, an appeals court ruled that another prediction market, PredictIt, should be allowed to continue operating until a final court ruling, despite a CFTC order to shut down.
In a statement emailed to CoinDesk, Kalshi's Chief Executive Officer Tarek Mansour said he "fundamentally" disagrees with the CFTC decision, but added he was optimistic the company's "vision will be recognized and embraced" in time.
"It's a known fact that radical innovation often requires time to be understood and accepted," Mansour added, citing a range of financial novelties that initially met skepticism, including exchange-traded funds, grain futures and insurance.
For Dennis Kelleher, CEO of consumer advocacy organization Better Markets, the CFTC's decision was "well-grounded" and "thoughtful," according to a statement in which Kelleher cited risks to election integrity and alleged violations of the Commodities Exchange Act in Kalshi's proposal.
"These markets are not intended or designed to be casinos for wild speculation-only bets," Kelleher said. "That's why the law places limits on how much people can speculate, or gamble, in these markets."
UPDATE (Sept. 22, 17:45 UTC): Adds comments from Mansour, Kelleher
More For You
Regulation, derivatives helping drive TradFi institutions into crypto, panellists say
Non-participation in decentralized finance is becoming a career risk for traditional finance professionals, panellists said.
What to know:
- Major financial institutions are expanding into crypto derivatives as clearer U.S. regulation helps make digital assets a mainstream portfolio allocation.
- New products such as overnight rate futures, multitoken indexes and access to DeFi liquidity are enabling institutional investors to move beyond bitcoin into broader crypto exposure and arbitrage strategies.
- Futures and other derivatives, underpinned by a robust industrywide beta benchmark, will channel trillions of dollars of institutional capital into crypto, making non-participation a growing career risk for traditional finance professionals, panellists said.
Top Stories
