The plaintiffs have also requested a hearing in front of US District Judge Lee Yeakel to hear arguments about the injunction.<\/p>\n
The CFTC has responded to the lawsuit by seeking a change of jurisdiction to the District of Columbia, where the federal agency is located. Then on Friday, the same day as the Bloomberg report, the commission also filed a motion in the Western Texas federal court to dismiss the case entirely.<\/p>\n
In the motion to dismiss, the CFTC argues that the Aug. 4 letter sent to PredictIt\u2019s creator, Victoria University of Wellington, NZ, was not a \u201cfinal agency action\u201d against the market.<\/p>\n
No-action letters are informal, staff-level statements that the issuing staff, as an exercise of their discretion, will refrain from recommending that the Commission take an enforcement action so long as certain conditions are met,\u201d <\/strong>the CFTC said in its motion. \u201cUnder CFTC regulations, a no-action letter does not bind the Commission or any staff division but the one that issues it, and the Commission itself does not vote on or issue them.<\/strong> By their very terms, no-action letters (and letters withdrawing them) carry no legal consequences for their beneficiaries or anyone else, and that is what the University chose.\u201d<\/p><\/blockquote>\nThe CFTC also claims the plaintiffs lack the standing to bring the lawsuit because the \u201cbeneficiary\u201d in the case is Victoria University. The university is not a party to the case.<\/p>\n
Future for Political Trading in the US<\/h2>\n
While Kalshi has not commented on the CFTC report, those involved in US political trading markets had plenty to say.<\/p>\n
One of the more prominent voices is Pratik Chougule, a trader and a commentator on Star Spangled Gamblers<\/em>. Early Saturday, just hours after the news broke, he posted a series of tweets explaining why he felt Kalshi\u2019s approach was \u201cvery risky\u201d and what he saw for the future of political trading.<\/p>\n“You have smart people from the outside who think they can come to DC and hack the system as if it’s an engineering problem,\u201d <\/strong>Chougule tweeted. \u201cThere’s an entire industry of lawyers and lobbyists who see a chump, see a big retainer, and are happy to promise the world but can’t do anything.”<\/strong><\/p>\nIn its letter to the CFTC requesting approval, Kalshi included data from an \u201cunregistered\u201d operator acting on a 2014 No-Action Letter. That operator had more than 29 million contracts on congressional control in the 2020 election cycle.<\/p>\n
The operator was not named in the letter, but it was clear that it was PredictIt.<\/p>\n