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June 26, 2023

The CFTC Should Not be Used as a Sneaky Backdoor to Unleash Gambling on U.S. Elections, Undermining Public Trust, Democracy, and the Commodity Markets

WASHINGTON, D.C.— Dennis Kelleher, Co-founder, President, and CEO, issued the following statement after the announcement by the Commodity Futures Trading Commission (CFTC) that it has commenced a review of self-certified event contracts by KalshiEX, LLC (Kalshi) concerning which political party will be in control of each chamber of the U.S. Congress, under CFTC Regulation 40.11(c):

“The CFTC regulates commodities like wheat, oil, gas, soybeans, and cattle, the price and availability of which are vital to all Americans. The CFTC has no experience, expertise, or mandate to police gambling, but Kalshi is claiming that gambling is a commodity and is trying to use the CFTC—a small, obscure financial regulatory agency having nothing to do with gambling—to enable retail traders to wager on the outcome of congressional elections through so-called event contracts.  That would violate the Commodities Exchange Act (CEA) and state laws, disrupt the commodities markets, harm our democracy, and conflict with critically important public policies, as detailed here.  Apparently in response at least in part to CFTC Commissioner Pham’s improper disclosure of internal confidential CFTC deliberations, analysis, and information, Kalshi withdrew its prior submission to prevent the CFTC from ruling against it and prohibiting this gambling.  In an apparent attempted sneaky end run around the CFTC review process, Kalshi has now self-certified its own gambling event contracts, trying to prevent the CFTC and others from thoroughly addressing the very serious issues raised by its proposal.

Gambling on U.S. elections would be a dramatic policy change with potentially grave national implications.  That should not be decided by a single private company and its many financial backers seeking to maximize profits.  Moreover, the CFTC was never intended or designed to review, approve, or regulate gambling, and presumably federal, state, and local officials will be surprised to learn that the CFTC was used as a vehicle for unleashing massive speculative gambling on the outcome of their elections – because, of course, Kalshi won’t limit itself to the single pending political event contract.  Before too long, Kalshi and others can be expected to be offering gambling on everything from local officials to the Presidency.  Given the use and abuse of social media in the gambling space and the A.I. in the political space, allowing gambling on U.S. elections will just invite more interference, abuse, and misconduct as gamblers seek to effect political outcomes to maximize their winnings.

“As important, introducing contracts based on political control events would go against the fundamental principles and historical foundations of the futures markets regulated by the CFTC, as we set forth in a recent letter to Chair Behnam. These markets exist for physical producers and purchasers to manage risk and determine prices based on supply and demand for essential commodities. Widespread speculative gambling among individual retail traders is inconsistent with the critical public purpose of these markets and excessive speculation is prohibited by law. These markets are not intended to function as casinos or predominantly cater to speculative activities, which is the inevitable result if not intent of Kalshi’s attempt to force fit gambling into the remit of the CFTC.  Presumably that is why the CFTC was going to deny Kalshi’s prior application, as previously disclosed to the public and Kalshi by Commissioner Pham.

“The CFTC is to be commended for commencing a review of the event contracts self-certified by Kalshi. We look forward to commenting during that process.  However, as we set forth in our recent letter, we believe that Commissioner Pham should recuse herself from any direct or indirect involvement in any matter related to Kalshi in light of her prior conduct and the pending complaint to the IG alleging very serious violations of law and policy.  Those actions suggest that a sitting Commissioner of the CFTC acted in the interests of a private entity with a pending matter before the CFTC and against the best interests of the CFTC.  At a minimum, her involvement raises the appearance of a conflict of interest and calls into question the fairness, transparency, and confidentiality of the process, undermining the trust and confidence of the public in the CFTC.”


Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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