Event contract marketplace Kalshi has been ordered to pause election bets after the Commodity Futures Trading Commission (CFTC) was granted an emergency stay while it considers appealing its recent court loss.

Bets on the upcoming US presidential election were taken on its website for mere hours before being taken down pursuant to the stay.

This comes after the CFTC failed to persuade district judge Jia M Cobb that it did not behave arbitrarily and irrationally in denying Kalshi the ability to list election outcomes as event contracts. That argument revolved around whether elections, or contracts formed around their outcomes, could be considered prohibited “gaming” under statutory interpretation.

Before filing the emergency stay pending appeal, the CFTC asked Judge Cobb for a stay pursuant to the full release of her opinion. That request was denied.

Divided opinions

Judge Cobb’s full opinion was released late last week. As expected, she agreed with Kalshi’s interpretation that the statute prohibiting “gaming” contracts referred to the underlying activity of the contract, not the contract itself. And because elections aren’t games, the CFTC had no right to deny Kalshi the right to list them as event contracts, the judge ruled.

Reactions to the appeal process within the CFTC has been divided.

Commissioner Caroline Pham, who has been against the CFTC’s decision to ban election contracts from the start, argued that the decision to appeal the case came too early. That decision was announced in a CFTC press release from September 10, which was before Judge Cobb’s decision was released.

Commissioner Pham said that she had dissented because the authorization to appeal was requested without access to sufficient information (ie the full text of the judgement).

She made clear that she did not have an issue with the CFTC exercising its right to appeal, but that she described the decision to appeal as a “knee-jerk reaction” and said that she continued “to be concerned that the Commission is constantly rushed to vote before thinking it through.” She reiterated her assertion that “bad process begets bad outcomes.”