Legal betting on the outcome of U.S. Congressional elections was swiftly halted by a federal appeals court mere hours after it commenced. The Court of Appeals for the District of Columbia Circuit issued an order on Thursday night, temporarily suspending the betting until further consideration and ruling on the matter, with no specified timeline provided. This action was taken shortly after a federal judge cleared the way for New York startup company Kalshi to offer bets on the outcome of the November elections, predicting which party would win control of the House and Senate.
U.S. District Court Judge Jia Cobb’s decision allowed Kalshi to launch its markets, with the company accepting undisclosed amounts of bets referred to as “contracts.” However, the order issued on Thursday evening put a stop to any additional bets, leaving uncertainty regarding the fate of existing bets made during the brief window. Notably, neither Kalshi nor the commission offered immediate responses to requests for comments following the court’s ruling.
The Commodity Futures Trading Commission lodged an appeal against Cobb’s ruling, expressing concerns that permitting election bets, even temporarily, posed significant risks of manipulation for financial gains. On the day the bets were live, prices for Kalshi’s predictive contracts fluctuated; for instance, a bet favoring the Republicans to control the Senate was priced at 76 cents, potentially paying out $129 for a $100 bet, while a bet on the Democrats securing the House stood at 63 cents, with a $100 bet offering a $154 payout.
Following the court’s order, the elections category that had been available on the company’s website on Thursday was absent by Friday afternoon. The future status of the bets made and the company’s offerings await further developments as the legal battle unfolds.
