WASHINGTON, D.C.—Stephen Hall, Legal Director and Securities Specialist, issued the following statement on the decision issued in KalshiEx LLC v. CFTC.

“The Court’s decision overturns a well-reasoned order by the CFTC denying Kalshi’s petition to offer an event contract on which party will win control of Congress. In these pivotal and fragile political times, the last thing our country needs is for democracy to be undermined further by allowing gambling on elections. We are deeply disappointed that the path for this contrived financial product has been opened, which will corrupt the integrity of our elections, trigger market manipulation, and victimize countless investors.

“In our brief in this case, we wholeheartedly supported the CFTC’s decision on both legal and policy grounds.  As we explained, Congress specifically foresaw the dangers posed by event contracts, and it authorized the CFTC to prohibit those that pose the greatest threats.  Among them are contracts that involve gaming or activity that is unlawful under state law, and Kalshi’s election gambling contract (EGC) falls into both categories.

“Gambling on elections will create powerful new incentives for bad actors to interfere with our elections and sway voters outside of the democratic process. The use of AI, ‘deepfakes’ and social media to manipulate voters and influence election outcomes has already become all too real.  Ready access to an election gambling contract such as Kalshi’s will intensify that danger with the promise of quick profits.

“The Court’s approval imperils election integrity, virtually guarantees widespread investor harm, and saddles the already stressed CFTC with an oversight responsibility that it is poorly equipped to fulfill.  And it opens the door to a wave of equally harmful variants. The CFTC did the right thing in rejecting these contracts in the first place, and we are deeply disappointed by the court’s decision.”

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