Appeals court stops election betting

An appellate court has put a stop to the first-ever American-based betting market for U.S. elections. 

The Washington Times reports that the court issued the temporary stop on Thursday evening after the betting market was okayed earlier in the day by a lower court judge.

The company behind the betting market is called Kalshi. It is a startup located in New York.

The big question behind the legal dispute is whether the independent federal body known as the Commodity Futures and Trading Commission (CFTC) has the power to stop Kalshi from accepting bets on the outcome of the upcoming election.

Here is what is going on:

The legal battle got underway when the CFTC attempted to block Kalshi from opening the election market. That is when Kalshi took the matter to the courts, and got an initial victory.

The Times reports:

Judge Jia Cobb ruled that the Commodity Futures Trading Commission overstepped its bounds when it tried to block Kalshi from creating the elections market. Her decision, which she reached last week and issued in writing on Thursday, cleared the way for Kalshi to move ahead.

Move ahead it did.

The company, in fact, immediately, began accepting bets.

The Associated Press reports:

People began betting Thursday on which political party would win control of Congress in the November elections after a judge’s ruling allowing the wagers — the only ones to be legally approved by a U.S. jurisdiction. New York startup company Kalshi began taking what amounts to bets on the outcome of the November congressional elections after a judge refused to block them from doing so.

Immediate appeal

Kalshi co-founder Tarek Mansour, after Cobb's ruling, released a statement celebrating it.

Mansour said:

The Kalshi community just made history, and I know we are only getting started. Now is finally the time to allow these markets to show the world just how powerful they are at providing signal amidst the noise, and giving us more truth about what the future holds.

However, it was shortly after this that CFTC took the matter to a federal appeals court, asking it to temporarily block Cobb's ruling, and the appellate court did so.

The Times reports:

The CFTC quickly ran to a federal appeals court which issued a short-term stay of Judge Cobb’s ruling Thursday night, although trading was still active as of 9 p.m.

Now, we will have to wait to see how this case plays out at the appellate court level.