CFTC Drops Kalshi Appeal, Paving Way for Political Betting Markets

The U.S. Commodity Futures Trading Commission (CFTC) has officially dropped its appeal in the case against Kalshi, a New York-based prediction market platform, clearing the way for it to offer political event contracts. According to a Monday court filing, the voluntary dismissal—still pending court approval—stipulates that each party will cover its own legal expenses, and Kalshi waives the right to sue the CFTC over the litigation.

Kalshi’s legal battle began in 2023 when the CFTC, under then-Chair Rostin Behnam, blocked Kalshi’s proposal to let users bet on which political party would control Congress, arguing such contracts constituted illegal gaming and violated the public interest. Kalshi filed a lawsuit in Washington, D.C., claiming the CFTC had exceeded its authority. In September 2024, the court ruled in Kalshi's favor.

Following the court’s decision, the CFTC attempted to delay Kalshi’s launch with a 14-day stay, which was denied, and later filed an appeal. However, the landscape shifted after Donald Trump returned to the presidency in early January 2025. Shortly after, his son, Donald Trump Jr., joined Kalshi as a strategic advisor. Rob Schwartz, the CFTC’s general counsel who had overseen the appeal, withdrew from the case in March and left the agency in April.

Under acting Chair Caroline Pham, the CFTC has since scaled back its crypto enforcement initiatives, streamlining regulatory focus to simplify oversight. Kalshi CEO Tarek Mansour celebrated the outcome, stating, “Today is historic. Kalshi’s approach has definitively secured the future of prediction markets in America.”

The dismissal marks a turning point for regulated political betting in the U.S., potentially reshaping the future of event-based financial instruments.