The D.C. Circuit Court of Appeals has granted the Commodity Futures Trading Commission’s (CFTC) request to dismiss its case against Kalshi regarding election-related event contracts, ending a nearly year-long battle.
Under President Joe Biden, the CFTC took a very strong stance against election-related contracts and took Kalshi to court for offering event contracts on the presidential election last year. Just days before President Donald Trump took office, the CFTC not only presented oral arguments about election betting but also a nuanced discussion of the definition gaming as it relates to event contracts.
However, with the case now dismissed, the opinion from the court on those oral arguments will never see the light of day.
CFTC investigating employee misconduct
Meanwhile, the CFTC is in a period of disruption, with a number of staffers on administrative leave pending an investigation.
In February, the head of Human Resources for the CFTC was dismissed, sparking rumors that Acting Chair Caroline Pham pushed the employee out because there was a pending HR investigation into her professionalism.
The CFTC released a response denying the rumors and said the employee failed to investigate a number of issues, including lying to a federal judge, telecommuting from outside of the U.S. and targeting Republicans in their role.
It is possible the administrative leave could be related to investigations into these matters, but the notice did not specify how many employees were on leave or the nature of the investigation.
Quintenz still awaiting Congressional confirmation
In the meantime, Trump’s nominee to run the CFTC, Kalshi board member Brian Quintenz, is still awaiting confirmation. The Senate received the nomination on Feb. 11 and the measure currently sits with the Committee on Agriculture, Nutrition and Forestry.
Quintenz has previously expressed views that he thinks sports contracts are legitimate offerings for sites like Kalshi and Robinhood.
With the shift in stance by the CFTC, regulated sportsbook operators are readying for a potential pivot or expansion to an event contract model.
Sporttrade, a regulated exchange that already operates akin to Robinhood, has written a letter to the CFTC requesting permission to expand nationwide. On Wednesday, Flutter, which operates Betfair, a successful exchange in Europe, said it is looking into a U.S. exchange as a possibility.
DraftKings previously registered with the National Futures Association, a necessary step to be certified by the CTFC, but has since withdrawn that registration.
