Bettors won’t be able to place any more wagers on the U.S. Congressional election – and maybe not at all.
The Court of Appeals for the District of Columbia issued a temporary freeze on legal political wagering on Thursday night while it considers the matter after the Commodities Futures Trading Commission (CFTC) opposed a federal judge’s decision, according to the Associated Press.
A released decision from a federal judge hours earlier opened the door for start-up Kalshi, the first federally regulated exchange in the U.S. to allow bets on real-world outcomes, to begin online election trading on its platform.
The number of wagers, or “contracts,” placed by traders before the appeals court’s reversal is unknown. No timetable for a final decision was issued, and what happens to the wagers already placed during the few hours Kalshi offered them is also unclear, the AP reported.
Almost ‘historic’ day
Despite having a robust regulated sports betting market in 38 states, betting on which party will gain control of the House or Senate in an election has been illegal in the U.S.
Kalshi, however, received a favorable ruling from U.S. District Judge Jia Cobb of the District of Columbia last week. Cobb shared her opinion on Thursday, beginning the accepting of trades on the November elections.
“Kalshi’s contracts do not involve unlawful activity or gaming,” Cobb wrote, according to CNN. “They involve elections, which are neither.”
Kalshi CEO and co-founder Tarek Mansour wrote on X last week that “for the first time in 100 years, Americans will have access to legal election markets at scale. Historic moment for financial markets.”
Election manipulation concerns
That was short-lived, at least for now.
The CFTC, a federal watchdog, immediately filed an appeal to Cobb’s ruling in hopes of stopping the political wagering market. The CFTC argued that this form of political betting is illegal and elections could be manipulated for financial gain.
“At a time when distrust in elections is at an all-time high, even a short listing of (Kalshi’s) contracts … could harm public perception of election integrity and undermine confidence in elections,” the CFTC said.
