The Commodity Futures Trading Commission on Monday moved to drop its appeal challenging a federal judge's ruling that allowed commodities exchange KalshiEx to offer contracts on U.S. political elections. The agency filed notice of the voluntary dismissal with the U.S. Court of Appeals for the District of Columbia Circuit.
Under terms agreed to by both parties, the agreement calls for Kalshi and the CFTC to bear their own costs and attorney fees. Kalshi agreed to waive all legal claims arising from litigation in the case. A CFTC spokesman said the commission had voted earlier to seek dismissal of the appeal.
Kalshi CEO Tarek Mansour released a statement following the decision. "Today is historic," Mansour said. "We have always believed that doing things the right way, no matter how hard, no matter how painful, pays off. This result is proof of that. Kalshi's approach has officially and definitively secured the future of prediction markets in America."
The regulatory action followed a September ruling by Washington, D.C., federal district court Judge Jia Cobb in Kalshi's favor. Judge Cobb had found Congress did not authorize the CFTC to conduct a public interest review that led the agency to bar the exchange from offering contracts on elections. The appeals court initially froze Judge Cobb's order but weeks later lifted that freeze, allowing Kalshi to accept bets on election outcomes while the CFTC continued its appeal effort.
Kalshi's platform currently lists event contracts covering political outcomes. These include options allowing users to bet on who will be the Republican and Democratic presidential nominees in 2028, the outcome of the Senate race in Georgia, and the Republican nominee for governor of Ohio.
CFTC Commissioner Summer K. Mersinger stated in February that election event contracts on platforms like Kalshi are "here to stay." She noted that Congress could direct the commission differently, but absent that, the agency would need to adapt to these markets.
The financial reform advocacy group Better Markets criticized the CFTC's decision to end the appeal, calling it a "betrayal of the public interest." Stephen Hall, Better Markets' legal director, stated the decision leaves intact a lower court ruling that he argued threatens the integrity of federal elections and risks market manipulation.
