The Commodity Futures Trading Commission (CFTC) is stepping back from its appeal in the high-profile legal case over election betting markets.
On Monday (May 5), the CFTC filed a motion asking the US Court of Appeals for the D.C. Circuit to dismiss its appeal against Kalshi, a company that’s been trying to launch a regulated market where people can bet on which party will control Congress.
The CFTC had previously blocked Kalshi’s plan, leading to the legal showdown. Now, it looks like the agency is ready to drop the fight, at least for now.
In its filing, the CFTC requested that “this appeal be voluntarily dismissed, on terms agreed upon by the parties in the attached Joint Stipulation.” The agency confirmed that “each party will bear its own costs, court fees and attorney fees incurred in the proceedings before this Court, the district court, and in administrative proceedings before the Commission.”
Kalshi, the trading platform at the center of the case, is also on board with the decision. According to the Joint Stipulation, Kalshi has waived “any and all claims relating to or arising from litigation of this matter” under both the Equal Access to Justice Act and the Small Business Regulatory Enforcement Fairness Act.
As part of the deal, Kalshi agreed to waivers that rule out any chance of the company seeking compensation for legal fees or claiming the CFTC overstepped its regulatory authority.
The motion was filed jointly by Anne W. Stukes, representing the CFTC, and Amanda K. Rice of the law firm Jones Day, representing Kalshi. Both attorneys stressed that while this move brings an end to this particular legal battle, it doesn’t settle the larger debate around the regulation of election betting markets.
Battle between Kalshi and the CFTC is not over
There’s a pretty decent chance that the D.C. Circuit will refuse to dismiss the CFTC v. Kalshi appeal, even on consent. The appeal has been fully briefed, orally argued (months ago) and a draft opinion has probably already been circulated.
There is a case directly on point.👇 https://t.co/ya9ZZHYYoZ
— Daniel Wallach (@WALLACHLEGAL) May 6, 2025
Legal expert Daniel Wallach pointed out on X that even though the CFTC and Kalshi have agreed to drop the case, it’s not a done deal just yet. The D.C. Circuit Court isn’t automatically bound by their agreement. Appellate courts have sometimes refused to dismiss appeals that have already been fully briefed and argued, especially when the case touches on issues of significant public interest.
Election markets are here to stay.
Prediction markets have been banned, censored, limited, and pushed out for decades. This win solidifies their right to exist and thrive.
It really took a village. Thank you to everyone who was part of this, who stuck with us through the hard… pic.twitter.com/q0x6wlwVhe
— Tarek Mansour (@mansourtarek_) May 5, 2025
Writing on X, Kalshi CEO Tarek Mansour stated, “Election markets are here to stay.”
He added: “Prediction markets have been banned, censored, limited, and pushed out for decades. This win solidifies their right to exist and thrive.”
Kalshi’s proposal to list contracts allowing traders to bet on the outcome of elections and congressional control had sparked intense legal and political debate. While the company has now resolved this particular case with the CFTC, it’s not entirely in the clear. Both the NBA and MLB have recently urged the CFTC to regulate betting on sports outcomes as well, an area that could impact Kalshi’s broader ambitions and put more regulatory pressure on the platform moving forward.
Featured image: Canva / Kalshi
