USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 1 of 15
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`
`United States Court of Appeals
`FOR THE DISTRICT OF COLUMBIA CIRCUIT
`
`
`
`Decided October 2, 2024
`
`Argued September 19, 2024
`
`
`No. 24-5205
`
`KALSHIEX LLC,
`APPELLEE
`
`v.
`
`COMMODITY FUTURES TRADING COMMISSION,
`APPELLANT
`
`
`On Emergency Motion for Stay Pending Appeal and
`Immediate Interim Relief
`(No. 1:23-cv-03257)
`
`
`
`
`
`Robert A. Schwartz, General Counsel, U.S. Commodity
`Futures Trading Commission, argued the cause for appellant.
`With him on the emergency motion for stay pending appeal and
`immediate interim relief and the reply was Anne W. Stukes,
`Deputy General Counsel.
`
`
`Yaakov M. Roth argued the cause for appellee. With him
`on the opposition to the emergency motion for stay pending
`appeal and immediate interim relief were Joshua B. Sterling,
`John Henry Thompson, and Amanda K. Rice.
`
`
`Before: MILLETT, PILLARD, and PAN, Circuit Judges.
`
`
`
`

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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 2 of 15
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`Opinion for the Court filed by Circuit Judge MILLETT.
`
` MILLETT, Circuit Judge: KalshiEx LLC, a commodities
`exchange regulated by the Commodity Futures Trading
`Commission, seeks to offer “Congressional Control Contracts”
`that would allow persons within the United States to place
`money on the outcome of the November 2024 congressional
`elections. The Commission prohibited Kalshi from listing the
`Congressional Control Contracts on its regulated exchange on
`the ground that they amount to gaming or election gambling,
`which many States outlaw.
` Kalshi challenged
`that
`determination in federal court under the Administrative
`Procedure Act, 5 U.S.C. § 706(2)(A), (C). The district court
`found
`that
`the Commission erred
`in categorizing
`the
`Congressional Control Contracts as involving either gaming or
`gambling and vacated its decision. The Commission now seeks
`a stay of the district court’s judgment while it pursues an
`appeal. Because the Commission has failed at this time to
`demonstrate that it or the public will be irreparably injured
`absent a stay, we deny its motion without prejudice to renewal
`should more concrete evidence of irreparable harm develop
`during the pendency of this appeal.
`
`
`I
`
`A
`
`
`
`
`
`
`
`Futures Trading Commission
`The Commodity
`(“Commission” or “CFTC”) is an independent federal agency
`charged under the Commodity Exchange Act with regulating
`derivative markets. 7 U.S.C. § 2(a).1 This case concerns a
`
`1 A derivative is a “financial instrument” or contract, such as a
`future, option, or swap, the price of which is “directly dependent
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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 3 of 15
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`subset of derivative contracts known as “event contracts.” An
`event contract is a derivative contract for which the “payoff is
`based on a specified event, occurrence, or value”—for
`example, the level of snowfall from a certain storm or the dollar
`amount of hurricane damage. CFTC, Contracts & Products:
`Event Contracts, https://perma.cc/4FPT-L2SN. Businesses
`and individuals can use event contracts to hedge against
`economic risk. KalshiEX LLC v. Commodity Futures Trading
`Comm’n, No. 23-cv-3257 (JMC), 2024 WL 4164694, at *2
`(D.D.C. Sept. 12, 2024). For example, a beachfront property
`owner might purchase an event contract predicting that a
`hurricane will reach landfall in her area to offset the risk of
`losing rental income from the storm. Id.
`
`Under the Commodity Exchange Act, only federally
`
`regulated exchanges, known as “Designated Contract Markets”
`(“Designated Markets”), can offer event contracts. 7 U.S.C.
`§§ 2(e), 7a-2(c)(5)(C)(i); see also 7 U.S.C. § 1a(19)(iv).
`Designated Markets can self-certify to the Commission that the
`contracts comply with the Commodity Exchange Act and the
`Commission’s regulations and start trading the contracts the
`following business day. 7 U.S.C. § 7a-2(c)(1), 17 C.F.R.
`§ 40.2.
`
`
`However, the Commodity Exchange Act includes a
`“Special Rule” under which the Commission can review and
`prohibit specific types of event contracts if it determines those
`contracts are “contrary to the public interest.” 7 U.S.C. § 7a-
`2(c)(5)(C)(i). The Special Rule provides:
`
`upon (i.e. derived from) the value of one or more underlying
`securities, equity indices, debt instruments, commodities, other
`derivative instruments, or any agreed upon pricing index or
`arrangement[.]” CFTC, Futures Glossary: A Guide to the Language
`of the Futures Industry, https://perma.cc/4V5S-8P5H.
`
`
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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 4 of 15
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`In connection with the listing of agreements, contracts,
`transactions, or swaps in excluded commodities that are
`based upon the occurrence, extent of an occurrence, or
`contingency * * * by a designated contract market * * *,
`the Commission may determine that such agreements,
`contracts, or transactions are contrary to the public interest
`if the agreements, contracts, or transactions involve—
`
`
`(I) activity that is unlawful under any Federal or State
`law;
`(II) terrorism;
`(III) assassination;
`(IV) war;
`(V) gaming; or
`the
`(VI) other similar activity determined by
`Commission, by rule or regulation, to be contrary to
`the public interest.
`
`
`Id.
`
`
`By regulation, the Commission has 90 days to determine
`whether to prohibit a Designated Market’s proposed event
`contract under the Special Rule. 17 C.F.R. § 40.11(c). During
`this review, the Designated Market cannot list or trade the
`contract. 17 C.F.R. § 40.11(c)(1).
`
`
`B
`
`On June 12, 2023, Kalshi submitted to the Commission a
`self-certification for event contracts it termed “Congressional
`Control Contracts.” Kalshi Opp. at 6; see J.A. 26. These
`contracts allow buyers to put down money based on a
`prediction as to which political party will control the U.S.
`House of Representatives or Senate on a future specified date.
`
`
`
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`

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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 5 of 15
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`They are “yes/no” contracts that pose the question: “Will
`<chamber of Congress> be controlled by <party> for <term>?”
`J.A. 26.
`
`Kalshi is not the first company to invite individuals and
`entities to lay down money based on electoral prognostications.
`In 1993 and again in 2014, the Commission issued “No Action”
`letters
`to
`two non-profit exchanges run by academic
`institutions—the Iowa Electronic Markets operated by the
`University of Iowa and PredictIt operated by the Victoria
`University of Wellington—that offer contracts tied, among
`other things, to election outcomes in the United States. Letter
`from Vincent McGonagle, Dir., Div. of Market Oversight, U.S.
`Commodity Futures Trading Comm’n, to Neil Quigley, Deputy
`Vice-Chancellor, Rsch., Victoria Univ. of Wellington (Oct. 29,
`2014), https://perma.cc/YD43-UPX4. These exchanges limit
`the number of users in each election market to 2,000 (Iowa
`Electronic Markets) and 5,000 (PredictIt) and cap individual
`investments at $500 (Iowa Electronic Markets) and $850
`(PredictIt). Id.; J.A. 164, 505. A third exchange, Polymarket,
`which became operational in 2020, also offers political
`contracts, but it never registered as a Designated Market with
`the Commission. J.A. 506. In a settlement the Commission
`announced in January 2022, Polymarket agreed to pay a civil
`penalty of $1.4 million and to restrict its contracts to non-U.S.
`investors. J.A. 506. Whether Polymarket has complied with
`the latter limitation is in question. Kalshi Opp. at 3;
`Commission Reply at 12–13.
`
`On the record before us, Kalshi’s Congressional Control
`Contracts would be materially different in multiple ways. To
`start, Kalshi’s contracts would be the first election-event
`contracts offered on a licensed commodities exchange, subject
`to the regulatory supervision of the Commission. In addition,
`while Kalshi says it would allow only United States persons to
`
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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 6 of 15
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`invest, the Commission worries that the contracts could be used
`by foreign persons or governments directly or indirectly to
`manipulate the election-contract market. Commission Mot. at
`21; Kalshi Opp. at 21. Lastly, while PredictIt and Iowa
`Electronic Markets limit both the number of investors and the
`amount they can spend, Kalshi places no cap on the number of
`investors and would allow individuals and entities to invest, in
`some cases, up to $100 million per contract. J.A. 33–35.
`
`On June 23, 2023, the Commission commenced a 90-day
`review of the Congressional Control Contracts and requested
`that Kalshi suspend trading on the contracts during that period.
`J.A. 145. That same day, the Commission opened a 30-day
`public comment period on the proposed contracts. J.A. 146–
`149. On September 22, 2023, the Commission issued a final
`order prohibiting Kalshi from listing the contracts. J.A. 23.
`
`The Commission grounded its decision on four findings.
`First, it determined that, by using the word “involve” in the
`Special Rule, Congress intended to capture both contracts
`whose underlying event is one of the enumerated categories
`(i.e., terrorism, assassination, or war) and contracts with a
`“different connection” to the enumerated activities “because,
`for example, they ‘relate closely’ to, ‘entail,’ or ‘have as an
`essential feature or consequence’ one of the enumerated
`activities.” J.A. 7. Second, the Commission determined the
`Congressional Control Contracts involved “gaming,” within
`the meaning of the Special Rule, because that term “includes
`betting or wagering on elections[.]” J.A. 8. Third, the
`Commission found the contracts were unlawful under state law
`because many States prohibit betting or wagering on elections.
`J.A. 11–12. Finally, the Commission determined the contracts
`were not in the public interest for two reasons. One, they were
`unlikely to be used for commercial-risk “hedging” or “price
`basing”—the “public interest[s] that transactions subject to the
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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 7 of 15
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`C[ommodity] E[xchange] A[ct] are intended to serve.” J.A. 14.
`Two, the contracts could threaten election integrity by, for
`example, creating monetary incentives for voters to support
`particular candidates or
`incentivizing
`the
`spread of
`misinformation. J.A. 20.
`
`
`C
`
`
`
`
`In November 2023, Kalshi filed suit in federal court
`challenging the Commission’s final order as arbitrary and
`capricious, contrary to law, and in excess of the Commission’s
`authority under the Administrative Procedure Act, 5 U.S.C.
`§ 706(2)(A), (C). See KalshiEx, 2024 WL 4164694, at *6.
`Kalshi objected to the Commission’s reading of the words
`“involve,” “gaming,” and “activity that is unlawful under any
`* * * State law” in the Special Rule and alleged that the
`Commission’s public interest determination was unreasonable.
`Kalshi Complaint ¶¶ 88–91.
`
`The district court subsequently granted Kalshi’s motion
`for summary judgment. KalshiEx, 2024 WL 4164694, at *13.
`The court reasoned that, within the meaning of the Special
`Rule, “gaming” must refer to the “act of playing a game” or
`“playing games for stakes.” Id. at *8, 10. Because elections
`are not games, the court concluded that the category does not
`apply to election contracts. Id. at *8–10. The district court also
`ruled that the term “involve” refers to the “event being offered
`and traded” under a contract, not the contract itself. Id. at *13.
`Thus, because the underlying events in the Congressional
`Control Contracts—“elections, politics, Congress, and party
`control”—are not themselves unlawful under state law, the
`contracts did not “involve” “illegal or unlawful activity.” Id.
`
`The district court entered a brief administrative stay, and
`then denied the Commission’s motion for a stay pending appeal
`
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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 8 of 15
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`on September 12, 2024. The Commission promptly appealed
`to this court. That same day, Kalshi listed its Congressional
`Control Contracts, and they traded for approximately eight
`hours, Kalshi Opp. at 8, until this court granted an
`administrative stay to consider the Commission’s motion for a
`stay pending appeal.
`
`
`II
`
`III
`
`
`A stay pending appeal is an “extraordinary” remedy.
`
`Citizens for Resp. & Ethics in Washington v. Federal Election
`Comm’n, 904 F.3d 1014, 1017 (D.C. Cir. 2018) (per curiam).
`To obtain such exceptional relief, the stay applicant must (1)
`make a “strong showing that [it] is likely to succeed on the
`merits”; (2) demonstrate that it will be “irreparably injured”
`before the appeal concludes; (3) show that issuing a stay will
`not “substantially injure the other parties interested in the
`proceeding”; and (4) establish that “the public interest” favors
`a stay. Nken v. Holder, 556 U.S. 418, 434 (2009) (quoting
`Hilton v. Braunskill, 481 U.S. 770, 776 (1987)).
`
`
`
` While the question on the merits is close and difficult, the
`Commission cannot obtain a stay at this time because it has not
`demonstrated that it or the public will be irreparably harmed
`while its appeal is heard. That failure is fatal to the
`Commission’s stay request because a showing of irreparable
`harm is a necessary prerequisite for a stay. See Wisconsin Gas
`Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir. 1985) (“We believe
`that analysis of the second factor disposes of the[] [stay]
`motions and, therefore, address only whether the petitioners
`have demonstrated that in the absence of a stay, they will suffer
`irreparable harm.”); cf. Chaplaincy of Full Gospel Churches v.
`England, 454 F.3d 290, 297 (D.C. Cir. 2006) (“A movant’s
`
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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 9 of 15
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`failure to show any irreparable harm is [] grounds for refusing
`to issue a preliminary injunction, even if the other three factors
`entering the calculus merit such relief.”).
`
`
`The Commission broadly claims that irreparable harm will
`occur because Congressional Control Contracts “could
`potentially be used in ways that would have an adverse effect
`on the integrity of elections, or the perception of integrity of
`elections[.]” J.A. 20; see also Commission Mot. at 19. The
`Commission marshals five more specific harms it anticipates,
`but none amounts to irreparable injury at this time. Several are
`not cognizable harms. The other concerns, if realized, certainly
`could hurt the public interest. But the Commission has failed
`to demonstrate that those harms are likely to occur. That falls
`short of the mark because “[i]rreparable harm must be ‘both
`certain and great[,]’ and ‘actual and not theoretical.’” Citizens
`for Resp. & Ethics in Washington, 904 F.3d at 1019 (quoting
`Wisconsin Gas Co., 758 F.2d at 674).
`
`the Commission, Congressional
`to
`First, according
`
`Control Contracts would “create monetary incentives to vote
`(including as an organized collective)
`for particular
`candidates,” Commission Mot. at 19, “even when such votes
`may be contrary to a voter’s * * * preferences[,]” J.A. 20.
`Paying someone to vote is, of course, illegal. See, e.g., 18
`U.S.C. § 597. But the Commission’s concern is different—it
`worries that voters might develop a financial motivation to
`vote. Yet voters already commonly consider their own
`financial interests when voting, whether based on business
`interests or family economics. The Commission has made no
`showing that allowing voters to hedge against an electoral
`outcome that they believe would be contrary to their financial
`interests would have any untoward impact on voting decisions.
`Nor has the Commission explained why it lacks such evidence,
`even though unregistered markets like Iowa Electronic
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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 10 of 15
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`Markets, PredictIt, and Polymarket have allowed individuals to
`place money on election outcomes for decades.
`
`that markets for
`the Commission claims
`Second,
`
`Congressional Control Contracts could “incentivize the spread
`of misinformation by individuals or groups seeking to
`influence perceptions of a political party or a party candidate’s
`success.” J.A. 20. In particular, the Commission points to the
`phenomenon of “fake poll[s].” Commission Reply at 10. The
`Commission then offers a single example: In July 2017, the
`firm Delphi Analytica created an apparently fake poll that
`showed the musician Kid Rock leading Senator Debbie
`Stabenow 30 percent to 26 percent in the November 2018 U.S.
`Senate election in Michigan. Id.; see also Tyler Yeargain, Fake
`Polls, Real Consequences: The Rise of Fake Polls and the
`Case for Criminal Liability, 85 MO. L. REV. 129, 133 (2020).
`The day the poll issued, Senator Stabenow’s “stock” price on
`PredictIt dropped from 78 cents to 63 cents, and ended at 70
`cents. Yeargain, supra, at 133–134. This, the Commission
`claims, shows that “market manipulation” is “not mere
`speculation[.]” Commission Reply at 10.
`
`
`But that example does not hold up to scrutiny. For starters,
`“falsified polling is nothing new.” Yeargain, supra, at 140. In
`2009 and 2010, companies released what experts considered to
`be fraudulent polls, but neither the article nor the Commission
`suggests those companies did so to manipulate election-betting
`markets. Id. Furthermore, “the long-term effect of the
`Michigan poll was virtually undetectable” because Kid Rock
`opted not to run and Senator Stabenow won reelection. Id. at
`134. Perhaps the Commission will amass more evidence
`substantiating its fears about election outcomes, but, on the
`evidence provided to this court, those fears—as yet—“fail to
`rise beyond the speculative level.” Citizens for Resp. & Ethics
`in Washington, 904 F.3d at 1019; see also Committee in
`
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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 11 of 15
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`Solidarity With People of El Salvador v. Sessions, 929 F.2d
`742, 745–46 (D.C. Cir. 1991) (“Injunctions * * * will not issue
`to prevent injuries neither extant nor presently threatened, but
`only merely feared.”) (formatting modified).
`
`In that regard, if the Commission felt the risks of election
`contracts were as concrete and pressing as it argues here, it has
`long had—and still has—the power to forbid them on the
`exchanges it regulates.
` Specifically, the Special Rule
`empowers the Commission to find through a formal rule or
`notice-and-comment rulemaking that certain types of event
`contracts—such as election contracts—are “contrary to the
`public interest” and to forbid them.
` 7 U.S.C. § 7a-
`2(c)(5)(C)(i)(VI).2 Yet in the seven years since the fake Kid
`Rock poll was used, the Commission has not invoked the very
`tool Congress gave it to head off such harms.
`
`Third, and relatedly, the Commission claims that the
`absence of reliable benchmarks for election-contract markets
`“may increase the risk of manipulative [market] activity.” J.A.
`21. According to the Commission, the “vast majority of
`commodities underlying Commission-regulated derivatives
`contracts” have reliable informational sources—for example,
`“government issued crop forecasts, weather forecasts, federal
`government economic data * * * [and] market-based interest
`rate curves[.]” J.A. 21. By contrast, the Commission argues,
`“unregulated” and “opaque” information sources like polls and
`voter surveys will supply the relevant information sources for
`Congressional Control Contracts. J.A. 21. The lack of reliable
`forecasts, the Commission claims, may make election-contract
`markets more susceptible to bad actors’ manipulation with fake
`
`
`2 “[T]he Commission may determine * * * by rule or regulation”
`that activities “similar” to the other listed categories are “contrary to
`the public interest.” 7 U.S.C. § 7a-2(c)(5)(C)(i)(VI).
`
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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 12 of 15
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`polls or misinformation, while simultaneously decreasing the
`Commission’s ability to detect such manipulation. J.A. 21.
`
`The Commission does not spell out this conclusion, but its
`theory seems to be that, while profit may be the primary goal
`of these election-contract purchasers, a byproduct will be
`misinformation about
`the upcoming elections.
` The
`Commission might be right. But Kalshi insists just the
`opposite. According to Kalshi, election-contract markets
`provide “real-time and accurate data that traditional polls often
`cannot replicate.” Kalshi Opp. at 4; see also J.A. 233
`(“[I]nformational models that require contributors to have ‘skin
`in the game’ when opining or contributing to public discussion
`[are] a great way to disincentivize the propagation of
`misinformation.”). Whatever the case, “simply showing some
`‘possibility of irreparable injury’”—that it “may” occur, J.A.
`21—is not enough. Nken, 556 U.S at 434 (citation omitted).
`
`More to the point, the Commission has not explained why
`traditional tools for regulating market manipulation will not
`work in the election-contract context. For example, the
`Commission can serve subpoenas, call witnesses, and hold
`hearings to investigate whether someone is manipulating an
`event contract. 7 U.S.C. § 9. And manipulating or attempting
`to manipulate the price of a commodity is a felony under
`federal law. 7 U.S.C. § 13(a). In addition, the Commission
`does not point
`to any pattern of unregulated market
`manipulation in the existing markets for election contracts.
`Plus Kalshi has introduced evidence that other political
`topics—such as the prospect of particular legislation passing or
`the federal government shutting down—have been the subject
`of event contracts on licensed exchanges. J.A. 245. Those
`events also lack established benchmarks for predictions, and
`yet the Commission has not shown they have proven more
`susceptible to market abuse.
`
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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 13 of 15
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`Fourth, on the Commission’s telling, individuals might
`trade in Congressional Control Contracts or engage in activity
`that influences the election-contract market to “create the
`impression of likely electoral success or failure” for certain
`candidates. J.A. 22. The Commission hypothesizes several
`such examples. One, paid employees of political campaigns or
`polling organizations, though prohibited from trading in
`Congressional Control Contracts, may engage in outside
`“activity” intended to “artificially move” those markets. J.A.
`22. Two, foreign investors may bypass Kalshi’s restrictions on
`foreign investment and use Congressional Control Contracts to
`influence elections. Commission Mot. at 21. Three,
`individuals or entities not excluded from trading—such as
`congressional campaign volunteers, consultants, or donors—
`might buy and sell contracts to change the perception of
`candidates’ likelihood of success. J.A. 22. In addition, the
`Commission points to comment letters it received during its
`review of Kalshi’s contract, including letters submitted by a
`number of U.S. Senators, that oppose the trading of election-
`contracts on regulated exchanges. See J.A. 681–683.
`
`Ensuring the integrity of elections and avoiding improper
`interference and misinformation are undoubtedly paramount
`public interests, and a substantiated risk of distorting the
`electoral process would amount to irreparable harm. The
`problem is that the Commission has given this court no
`concrete basis to conclude that event contracts would likely be
`a vehicle for such harms. The Commission cites to only one
`example where a trader on an unregulated (and now-
`suspended) exchange placed large bids on Mitt Romney to win
`the 2012 presidential election. Commission Reply at 10. It is
`“conceivable” the trader did so to “manipulate beliefs about the
`odds of victory in an attempt to influence fundraising,
`campaign morale, voter preferences, and turnout.” David M.
`
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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 14 of 15
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`et al., Trading Strategies and Market
`Rothschild
`Microstructure: Evidence from a Prediction Market, THE
`JOURNAL OF PREDICTION MARKETS, Nov. 22, 2015, at 22. But
`the trader fell short because the attempted manipulation was
`easily detected by market investors. Id. at 23. And the
`Commission’s speculation about that trader’s “conceivable”
`motivations is, at bottom, an “unsubstantiated and speculative”
`theory. Wisconsin Gas Co., 758 F.2d at 674. Notably, the
`Commission offers no other evidence that such market
`machinations have happened over the last 36 years in which
`unregulated markets have offered election contracts.
`
`Finally, the Commission claims that, as the “regulator of
`
`the markets in [Congressional Control] [C]ontracts, [it] would
`be required to investigate suspected manipulation in those
`markets”—a
`job
`it
`is
`ill-suited
`to perform and
`that
`“misalign[s]” with its “historic mission and mandate[.]” J.A.
`22–23. Though the Commission would be authorized to
`investigate suspected manipulation, it could also draw on the
`expertise of other federal agencies or refer suspected violations
`to those agencies. See, e.g., Federal Election Commission,
`Enforcing Federal Campaign Finance Law
`(“[O]ther
`government agencies [may] refer possible violations to the
`FEC.”), https://perma.cc/K8NJ-TNPF. In any event, the
`Commission’s generalized worries about
`investigative
`challenges, without more, do not amount to irreparable harm.
`
`
`* * * * *
`
`
`In short, the concerns voiced by the Commission are
`
`understandable given the uncertain effects that Congressional
`Control Contracts will have on our elections, which are the
`very linchpin of our democracy. But whether the statutory text
`allows the Commission to bar such event contracts is debatable,
`and the Commission has not substantiated that risks to election
`
`
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`USCA Case #24-5205 Document #2077790 Filed: 10/02/2024 Page 15 of 15
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`15
`integrity are likely to materialize if Kalshi is allowed to operate
`its exchange during the pendency of this appeal. At this point,
`in other words, the Commission has failed to make the essential
`showing of irreparable harm.
`
`
`But such a showing is not out of reach. For example,
`political campaigns or their proxies encouraging supporters to
`purchase Congressional Control Contracts could constitute
`evidence that the contracts harm election integrity or that
`manipulation is underway. Foreign investors bypassing
`Kalshi’s restrictions on foreign traders, just as Kalshi claims
`U.S. investors are doing on Polymarket, could substantiate the
`Commission’s concerns about harmful interference. See
`Kalshi Opp. at 20. Or evidence emerging that election-contract
`markets confuse American voters about the strength or viability
`of certain candidates might also satisfy the Commission’s
`burden. Other evidence of harms could also emerge. Because
`the Commission may (or may not) identify cognizable harms
`going forward, this ruling is without prejudice to the
`Commission’s renewal of its stay request during the pendency
`of this appeal.
`
`
`IV
`
`
`The Commission has failed to demonstrate that it or the
`
`public will suffer irreparable injury absent a stay pending
`appeal, and therefore its motion for a stay is denied without
`prejudice to renewal should substantiating evidence arise. The
`administrative stay is hereby dissolved.
`
`
`So ordered.
`
`
`
`