KalshiEX LLC v. Commodity Futures Trading Commission

Overview

The case that opened the door. After the CFTC ordered Kalshi not to list contracts on which party would control Congress, Kalshi sued. In September 2024 Judge Jia M. Cobb vacated the CFTC’s order, holding that the contracts did not involve “unlawful activity” or “gaming” within the Commodity Exchange Act’s special rule, and that the agency had no free-floating public-interest veto. Election contracts have traded continuously since.

The CFTC appealed. A motions panel denied a stay in October 2024 on irreparable-harm grounds alone, calling the merits “close and difficult” (119 F.4th 58); the merits were argued in January 2025; and in May 2025 the Commission voluntarily dismissed its own appeal on stipulated terms. No appellate opinion ever issued and the judgment was never vacated.

Read this case narrowly, because it is routinely overstated. It is district-court authority that binds no one and was never reviewed. It is not preemption authority: the opinion states in terms that “this Court does not make any decision or judgment on the preclusive scope of the CEA’s special rule” — the exact question every state case on this tracker is litigating. And it is not authority that sports contracts are lawful. Applying its own definition of gaming, the court wrote that “event contracts related to any of the sporting events the senator mentioned on the floor could implicate the gaming category” and that “[a]ll these events can easily be construed as games” — the senator’s examples being the Super Bowl, the Kentucky Derby and the Masters. The Ninth Circuit reached the same conclusion about “gaming” in Assad in August 2026.

Changes

September 2026

• FilingSeptember 24, 2026

  The CFTC told the Ninth Circuit it expects its revised Rule 40.11 — the rule governing which event contracts exchanges may list — to be final within two months. Kalshi relayed the statement to the Fourth Circuit the next day and asked it to wait for the rule.

  CFTC response, 9th Cir. No. 26-4281 (Dkt. 29)

September 2024

• CorrectionSeptember 12, 2024

  Two of our docket links pointed to unrelated cases: the District of Columbia link went to a bankruptcy case and the D.C. Circuit link to a South Carolina family-court matter. They now point to Nos. 1:23-cv-03257 and 24-5205. The stay-opinion link was also replaced with the D.C. Circuit’s October 2, 2024 opinion.

  CourtListener — D.D.C. No. 1:23-cv-03257

Timeline

What's next: Closed. The CFTC withdrew its 2024 event-contract rulemaking and its 2025 sports-contract staff advisory in February 2026. Its June 2026 proposed rule on prediction markets (91 Fed. Reg. 35,806) closed for comment July 27, 2026. On September 24 the CFTC told the Ninth Circuit it expects the revised Rule 40.11 to be final within about two months; no final rule had been published in the Federal Register as of November 8. Separately, the CFTC announced two rules on the definition of “swap” on October 9, 2026, both published October 19: an interim final rule, in force from October 19, that excludes bets taken by state- or tribally-licensed sportsbooks and casinos, and a proposed rule that would expressly include event contracts, sports contracts among them. Comments on both close November 18, 2026. On November 5, 2026 the CFTC issued an interpretation of its impartial-access rule saying exchanges generally may not restrict access by a trader’s location within the United States. Its announcement gave exchanges 30 days to drop such restrictions or explain to the Division of Market Oversight why they cannot, and told them to make sure brokers routing to them do not impose their own. The interpretation takes effect on Federal Register publication and does not address court orders that require geofencing.

Parties