The US Court of Appeals for the District of Columbia Circuit has ruled that prediction markets that allow betting on US elections are legal.
The decision comes on Oct. 2, when the U.S. Commodity Futures Trading Commission (CFTC) rejected an appeal from an earlier ruling against the regulator in its case with Prediction Market Calsi, asking the court to order an administrative stay. The judgment was handed down.
The court held that the CFTC failed to demonstrate that the public would be irreparably harmed by the provision of U.S. election-based contracts.
Tarek Mansour, founder of US-based prediction market Kalsi, said of X:
“The US presidential election market is legal. Officially. Finally. Kalsi wins.”
As a result, Kalsi is now able to resume providing U.S. election-related contracts. Nevertheless, the circuit court judges emphasized that a new injunction motion could be renewed “if substantive evidence is found.”
On September 22, 2023, the CFTC announced that Kalsi was not allowed to make political contracts on its platform after prediction markets asked regulators to list contracts based on which political party controls the U.S. Congress this year. prohibited from providing.
Prediction Markets then sued the CFTC, arguing that the regulator's ban was outside its authority. Judge Cobb then sided with Carsi and filed a motion for an injunction.
Potential Wins for Crypto Platforms
US lawmakers call for CFTC crackdown on US election prediction markets In a letter to Chairman Rostin Behnum on August 5th,.
Among the eight senators who signed the document are Sen. Elizabeth Warren (D-Mass.), Sen. Chris Van Hollen (D-Md.), and Sen. Sheldon Whitehouse (D-Md.). (RI), as well as Congresswoman Eleanor Holmes Norton (D-Washington, DC) and Congressman Jamie Raskin. (D-MD).
The document argued that elections are not commercial enterprises and that enforcement action against the platforms offering these contracts would “restore confidence” in elections.
Meanwhile, U.S. Rep. Richie Torres also wrote a letter to CFTC Chairman Behnum asking for regulation of election-related prediction markets instead of the ban proposed by lawmakers in August.
Kalsi’s latest legal victory could be an advantage for crypto-native prediction markets such as BET and Polymarket if the CFTC decides to comply with the enforcement request.
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