Kalshi has filed a motion for rehearing in the Sixth Circuit court based on the Commodity Futures Trading Commission's (CFTC) new definition of the term "swaps."
On Friday, October 9, the CFTC published a Notice of Proposed Rulemaking that seeks to include event contracts based on sports, politics, cultural and weather-based events in the term "swaps."
In September, the US Court of Appeals for the Sixth Circuit ruled against Kalshi and in favor of regulators from Ohio and Tennessee.
The court found that the prediction market operator had not established that its sports event contracts fell exclusively under federal regulation.
However, following the CFTC's latest Notice of Proposed Rulemaking, Kalshi's legal counsel Joshua Sterling wrote, announcing the petition on LinkedIn: "Rehearing motion for Kalshi filed in the Sixth Circuit. Reflects the rules by the US Commodity Futures Trading Commission released yesterday (10/9). We appreciate the opportunity to be heard by the court. (And betting is not trading.)"
The CFTC issued this new definition in the hopes of providing market clarity. Chairman Michael S. Selig stated: "Americans use event contracts to hedge risks, speculate and provide the public with information about the outcome of future events.
“These products are commodity derivatives squarely within the CFTC’s regulatory remit under the Commodity Exchange Act and are within the agency’s exclusive jurisdiction.”
However, the government agency took a clear stance against casino-style gambling products. “Casino-style gambling products are not derivatives,” CFTC Chairman Michael Selig said.
Kalshi achieved its first legal victory over state regulators in quite some time in October when an Illinois Federal District court granted preliminary injunction motions from the operator
