Donald Trump Jr-backed Kalshi is in the clear, CFTC withdraws appeal 

The U.S. Commodity Futures Trading Commission (CFTC) has finally decided to dismiss its appeal against Kalshi, a derivatives trading platform, in a case that saw the agency debating the legality of election event contracts.

According to reports, the CFTC filed a motion on  May 5, 2025, with the D.C. Circuit Court to voluntarily dismiss its appeal in its case against Kalshi.

The filing indicated that the CFTC and Kalshi agreed to the dismissal, and both parties chose to take care of their respective legal costs and fees. The CFTC did not share details about the reason for the withdrawal of the appeal. However, the decision was reportedly made after a 3-0 vote by the commission (with one commissioner abstaining) to drop the case.

Election markets are here to stay.

Prediction markets have been banned, censored, limited, and pushed out for decades. This win solidifies their right to exist and thrive.

It really took a village. Thank you to everyone who was part of this, who stuck with us through the hard… pic.twitter.com/q0x6wlwVhe

— Tarek Mansour (@mansourtarek_) May 5, 2025

The CFTC is dismissing the case voluntarily

The CFTC previously blew hard against Kalshi’s offering of event contracts that allowed betting on events like the U.S. election. In a defense of its stance, it argued that such contracts could threaten the democratic process or constitute “gaming” outside the agency’s jurisdiction.

In September 2024, a federal district court judge in Washington, D.C., ruled in favor of Kalshi, giving it the right to offer these contracts. The appeal about to be dismissed was the CFTC’s response to that ruling.

The dismissal does not come as a surprise to many as it was expected given the new administration’s more friendly disposition towards prediction platforms. There’s also the fact that Kalshi now has ties to the Trump family through Donald Trump Jr., its strategic adviser. President Trump’s nominee for CFTC Chair, Brian Quintenz, also happens to be a Kalshi board member.

Kalshi’s CEO, Tarek Mansour, celebrated the development, stating on X that “election markets are here to stay,” a post that reflects his confidence in the platform’s future.

Analysts think it is too early to celebrate

While it seems like an agreement has been reached between the CFTC and Kalshi, the company is not yet completely out of the woods because the D.C. Circuit Court retains the authority to deny the dismissal motion.

This fact was highlighted by gaming attorney Daniel Wallach, who posted a thread about the matter on X. “The agreement between the CFTC and Kalshi to dismiss the appeal is not binding on the DC Circuit,” he wrote before adding that, “Appellate courts have been known to deny stipulated motions to dismiss appeals that have been fully briefed and orally argued, especially when they involve issues of public importance.”

The court’s decision could depend on procedural or legal considerations, since the appeal had gone far enough, with oral arguments already heard. Furthermore, Kalshi still faces regulatory scrutiny over other event contracts, particularly those related to sports, from state regulators in areas like Nevada and New Jersey.

Despite these legal and regulatory challenges and the possibility of the dismissal to be rejected, the willingness of the CFTC to even have it thrown out is proof of a maturing regulatory climate sponsored by the new friendly Trump administration.

If the case is resolved, it would mark a significant milestone for prediction markets in the U.S. and a big win for Kalshi because it wouldn’t have to lose the huge market share associated with election-related markets.