Even Temporarily Blocking Election Contracts Risks ‘Irreparable’ Harm, Kalshi Argues

Kalshi, who recently secured a favorable court decision permitting their political prediction markets to operate in the U.S., stated that the Commodity Futures Trading Commission (CFTC) would not face severe damage if their new contracts were allowed during the appeal period. However, Kalshi expressed concern that they could experience “significant and, in fact, permanent harm” if prevented from facilitating bets on the 2024 election outcomes.

Kalshi stated that if a stay is granted, they will miss out on substantial income from these trading contracts. Essentially, such a pause would render the Congressional Control Contracts worthless for this election cycle, which ends before the appeal is settled – effectively giving the CFTC a victory in practice, even though they lost in court.

Last year, Kalshi attempted to list its markets, yet faced a roadblock from the Commodity Futures Trading Commission (CFTC) due to worries about political prediction markets. The company then filed a lawsuit and emerged victorious just recently. However, the CFTC requested an emergency halt on Kalshi’s listing, but failed in that attempt as well. On Thursday afternoon, the contracts were launched, only to be paused temporarily by the D.C. Appeals Court while they review the emergency stay request.

On Friday, Kalshi is making an attempt to persuade the judges of the appeals court that they should permit it to carry out trades with its contracts, as the CFTC’s overall appeal in the case moves forward within the judicial system.

The stay would prevent Kalshi from recouping the substantial amount of money it invested in constructing and promoting its new products, as indicated in the filing. Additionally, it would hinder Kalshi from establishing a competitive position within an industry that already hosts platforms like Polymarket, which operate their own prediction markets offshore.