The Commodity Futures Trading Commission has ruled that exchange firm Kalshi cannot take bets on the 2024 Congressional Elections.
The Commission has published a statement on its website outlining that Kalshi’s intention to host political betting is unlawful and cited that it is not in the public interest to take bets on such events.
“The Commodity Futures Trading Commission today issued an order disapproving congressional control political event contracts self-certified by KalshiEX LLC,” a statement from the CFTC read. “The contracts would have been cash-settled, binary contracts based on the question: ‘Will <chamber of Congress> be controlled by <party> for <term>?’
“After reviewing the complete record, the CFTC determined the contracts involve gaming and activity that is unlawful under state law and are contrary to the public interest, and therefore, pursuant to section 5c(c)(5)(C) of the Commodity Exchange Act and CFTC Regulation 40.11, the contracts are prohibited and cannot be listed or made available for clearing or trading on or through Kalshi.”
Kalshi usually takes bets on events such as how long inflation lasts in the US or how long certain events will carry on for, usually within the realm of current affairs.
But concerns were raised when the firm announced intentions to take bets on the Congressional Election 2024, which is anticipated to be a closely fought election.
The firm confirmed these intentions in June but it quickly garnered criticism from lawmakers who deemed it to “undermine the sanctity and democratic value of elections.
A statement from Sen. Elizabeth Warren, Sen. Dianne Feinstein, and Sen. Jeff Markley read: “Introducing financial incentives into the elections process fundamentally changes the motivations behind each vote, potentially replacing political convictions with financial calculations.”
However, this saga may not be over, as demonstrated by PredictIt, which had a district court verdict overturned in the Fifth Circuit Court of Appeals allowing it to continue operating for the time being.
PredictIt takes political bets but the data is primarily used for data-gathering for academic researchers rather than for recreational wagering purposes.
