For years, legally betting real money on a US election was almost impossible to do onshore. That changed in the autumn of 2024, when a federal court cleared the way for a regulated exchange to list contracts on who would control Congress — and, within days, on the presidency itself. The case, KalshiEX LLC v. CFTC, is the single most important legal event in the modern history of prediction markets, and its logic still shapes what you can trade today.
The world before
Before 2024, real-money US election markets lived in a grey zone. The CFTC had resisted letting its regulated exchanges list election contracts, academic markets operated under narrow no-action relief, and anything larger tended to be offshore or in legal limbo. The open question was whether a CFTC-regulated exchange could offer election contracts at all — and Kalshi decided to force the issue.
Kalshi’s congressional contracts
Kalshi, a CFTC-registered designated contract market, self-certified a product it called Congressional Control Contracts in 2023: simple cash-settled, yes/no contracts on which party would control a chamber of Congress after the November 2024 elections. As binary event contracts they looked, structurally, like any other product Kalshi listed — the only novelty was the subject.
The CFTC’s ban
On 22 September 2023, the Commission — in a 3–2 vote — issued a final order prohibiting the contracts. It invoked the Special Rule, finding that the contracts “involved” both gaming and activity unlawful under state law, and were contrary to the public interest. The CFTC argued the word “involve” reached not just the underlying event but the act of listing and trading the contract itself — a broad reading of its own authority. Kalshi disagreed and, in November 2023, sued in the US District Court for the District of Columbia, arguing the order was arbitrary and capricious under the Administrative Procedure Act.
The court ruling
On 6 September 2024, Judge Jia Cobb granted Kalshi summary judgment and vacated the CFTC’s order. Her reasoning turned on two undefined words. “Gaming,” she held, means the act of playing a game for stakes — and elections are not games, so the category did not apply. And “involve,” she found, refers to the underlying event being traded — elections and party control — which are not themselves unlawful under state law. On that reading the Special Rule was never triggered, and the CFTC had no authority to ban the contracts. The Commission immediately appealed and won a brief administrative stay, but on 2 October 2024 the D.C. Circuit denied a stay pending appeal, finding the CFTC had not shown it would be irreparably harmed. Election contracts went live.
What it changed
The effect was immediate. Kalshi resumed its congressional markets and quickly added contracts on the 2024 presidential race, booking millions of dollars in volume; other regulated venues followed. The legal coda came in May 2025, when the CFTC — under new leadership and a more permissive posture — voluntarily dropped its appeal, leaving the district-court ruling standing as the governing outcome. Regulated election markets are now a settled part of the US landscape, from the presidency down to individual races. Two things the ruling did not settle: availability still varies by state, and the same “is it gaming?” question reopened on a new front with sports contracts.
Frequently asked questions
What was the 2024 Kalshi v. CFTC ruling about?
Whether a CFTC-regulated exchange could list contracts on US election outcomes. The CFTC had banned Kalshi’s congressional-control contracts as ‘gaming’ and unlawful activity; a federal court disagreed, ruling that elections are not games and the underlying events are not unlawful, so the CFTC could not prohibit them.
Why did the court allow election contracts?
Judge Jia Cobb found that under the Commodity Exchange Act’s Special Rule, ‘gaming’ means playing a game for stakes — and elections are not games — while ‘involve’ refers to the underlying event, which is not unlawful under state law. On that reading the rule the CFTC relied on did not apply.
Are election prediction markets legal now?
On CFTC-regulated exchanges, yes — the 2024 ruling stands, and the CFTC dropped its appeal in May 2025. But availability still varies by US state, so whether you can trade election contracts depends on where you live; check the current position before funding an account.