Judge Jia Cobb of the U.S. District Court for the District of Columbia ruled in favor of prediction market Kalshi in its case against the Commodity Futures Trading Commission (CFTC). The CFTC had taken an aggressive stance towards prediction markets, ordering penalties and attempting to shut down platforms. Kalshi, however, had legal protection as a regulated exchange. The CFTC argued that Kalshi's political contracts involved gaming, but Judge Cobb disagreed, stating that they involved elections and politics, not illegal activities. The CFTC requested a stay on the ruling, which was granted. The CFTC is engaged in "midnight rulemaking" to broaden the scope of gaming. The ruling may mean that election event contracts are legal. The authors of the article hope that this ruling marks a turning point in the regulation of prediction markets.



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