The U.S. Commodity Futures Trading Commission has directed Kalshi to keep offering its event contracts, telling the prediction market to ignore a Washington court order that would halt most of its business. The CFTC filed an emergency order in court as Kalshi faces a ban.
What the Washington court ordered
A court in Washington issued a cease ruling that stops Kalshi from offering most of its event contracts. The order came after a legal challenge to the platform's operations, which let users bet on everything from election outcomes to economic data. Kalshi had been running those markets for months, but the court's decision put a stop to the bulk of them.
The ruling didn't cover every contract, but it was broad enough to cut into the company's core business. Kalshi didn't immediately say how many contracts were affected, but the company's lineup includes hundreds of markets tied to current events and policy decisions.
CFTC's federal directive
The CFTC responded by telling Kalshi to keep operating under federal rules, which the agency says preempt state court orders. In an emergency filing, the CFTC argued that its oversight of event contracts falls under federal law, and that a state court can't override that authority. The agency asked the court to step in and block the state ruling from taking effect.
This puts Kalshi in a bind. The company has to decide whether to follow the state court and pull its contracts, or follow the CFTC and keep them live. The CFTC's directive is clear: continue operations as per federal rules, regardless of what the state court said.
The legal standoff
The emergency order is now before a federal judge, who will have to weigh the CFTC's claim of federal supremacy against the state court's cease ruling. The outcome could set a precedent for how prediction markets are regulated across the country. If the federal court sides with the CFTC, Kalshi can keep trading. If it doesn't, the company could be forced to shut down most of its platform.
Neither side has said when the judge will rule. Kalshi hasn't publicly commented on the CFTC's directive, and the company's next move is unclear. For now, the platform is still live, but the clock is ticking on a decision that could reshape the entire event contracts industry.
