By Laura Matthews

WASHINGTON (Reuters) – The U.S. Commodity Futures Trading Commission (CFTC) has requested a federal appeals court to expedite a hearing regarding the legality of derivatives contracts for betting on U.S. election outcomes.

The filing on Wednesday evening followed the appeals court’s earlier decision to block the CFTC’s attempt to stop derivatives trading platform KalshiEX LLC from listing election contracts while an appeal is pending. A lower court had previously permitted Americans to place bets on these contracts.

The CFTC’s appeal cites the public’s interest in a swift resolution, stating, “The public’s interest lies with prompt disposition of this appeal.”

The agency contends that election contracts may be vulnerable to market manipulation and could mislead public perception about election integrity. The CFTC remarked, “This would place the CFTC in the position of investigating such activities in election markets, well outside of its traditional areas of responsibility.”

The CFTC has requested the court to hold oral arguments in early December, though Kalshi has suggested it will oppose the expedited appeal.

Earlier, the appeals court dismissed the CFTC’s motion to pause the lower court’s order, stating the regulator failed to demonstrate how Kalshi’s “event” contracts would harm the agency or public interest. Consequently, Kalshi can temporarily offer trading in these contracts, potentially opening the door for other firms to offer similar derivatives in the future, as U.S. elections are scheduled for November 5.

The Circuit court noted, “The CFTC has given this court no concrete basis to conclude that event contracts would likely be a vehicle for distorting the electoral process.”