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'An Explosion of Election Gambling' Is Nigh, CFTC Warns Appeals Court

Author: Content Editor
The U.S. Commodity Futures Trading Commission (CFTC) has warned of an imminent "explosion in election gambling" and asked an appeals court to extend the pause on Kalshi's political prediction markets for as long as the agency's appeal is pending. The CFTC argues that the district court's decision to allow Kalshi to offer contracts on which party will control each house of Congress has been misconstrued as open season for election gambling. The agency believes that unless the U.S. Appeals Court extends the pause, other CFTC-regulated exchanges will follow suit, leading to harm to the public interest, including market manipulation and damage to electoral integrity. Furthermore, the district court's decision could have repercussions for cryptocurrency businesses and impact federal agencies' authority in the absence of new legislation from Congress. Kalshi, which filed to list election markets last year, sued and won last week but the contracts were temporarily suspended pending the appeals court's decision on the emergency stay filed by the CFTC. The CFTC argues that Kalshi's financial losses would pale in comparison to the harm caused by allowing election gambling on U.S. futures markets. The agency also dismisses Kalshi's argument that it was trying to comply with the law, stating that compliance doesn't excuse illegal practices.

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