The U.S. Commodity Futures Trading Commission (CFTC) has moved to voluntarily dismiss its appeal against Kalshi, effectively allowing the New York-based derivatives trading platform to continue offering contracts that let Americans bet on election outcomes.

In a filing with the U.S. Court of Appeals for the D.C. Circuit on Monday, the CFTC requested to drop its appeal following a 3-0 commission vote, with one commissioner abstaining. The agreement stipulates that each party will bear its own costs and fees, with KalshiEX LLC waiving all legal claims arising from the litigation.Tarek Mansour

“Today is historic. We have always believed that doing things the right way, no matter how hard, no matter how painful, pays off,” said Tarek Mansour, CEO and co-founder of Kalshi, in a statement.

The decision marks a significant development in the regulation of prediction markets and event-based contracts in the United States. Kalshi currently offers contracts on various political outcomes, including potential 2028 presidential nominees and specific Senate races.

The dispute began in June 2023 when Kalshi sought CFTC permission to list contracts allowing Americans to bet on which party would control the House of Representatives and Senate. The CFTC initially prohibited these contracts, citing concerns about unlawful gaming and public interest issues.

Kalshi responded by filing a lawsuit, arguing the CFTC had exceeded its authority. In September, D.C. District Court Judge Jia Cobb ruled in Kalshi’s favor, determining that Congress had not authorized the CFTC to conduct the public interest review that led to the ban.

Although the CFTC immediately appealed and secured a temporary stay, the appeals court later lifted the freeze, allowing Kalshi to proceed with offering election-related contracts while the appeal was pending.