President Trump’s new acting Commodity Futures Trading Commission Chairman, Caroline Pham, has supported Kalshi and its election contracts throughout her tenure as a commissioner.
Pham first became a CFTC commissioner in April 2022 after Joe Biden nominated her followed by a unanimous Senate confirmation. Pham has made policy recommendations for the U.S. Treasury and advised companies on how to adapt to major financial legislation, including the Dodd-Frank Act.
Her tenure as commissioner overlapped with most of Kalshi’s efforts to legalize election contracts. From Kalshi’s first political event contract submission to PredictIt’s case with the CFTC, Pham has supported election contracts based on what she sees as the CFTC’s missteps.
Pham outlined her vision as Chairman, emphasizing the importance of returning the CFTC to its core principles.
“As the CFTC celebrates our 50th anniversary, we must also refocus and change direction with new leadership to fulfill our statutory mandate to promote responsible innovation and fair competition in our markets that have continually evolved over the decades,” Pham said. “It’s time for the CFTC to get back to the basics.”
Among those “basics” are following cases through proper procedures.
Avoiding regulatory oversteps
In a May 2024 press release, Pham laid out her concerns regarding the CFTC’s regulatory processes.
“Over the past several years, a concerning number of CFTC complaints filed in litigation in federal court have been dismissed for failure to state a claim (insufficient facts to support a charge or incorrect as a matter of law) or on summary judgment (incorrect as a matter of law), or overturned in appellate court, meaning that the CFTC does not understand and is wrong about the application of our own statute and our own regulations.”
In one case, the CFTC was accused of submitting false statements and in another, the Fifth Circuit brief stated that the CFTC violated the court’s injunction to keep PredictIt’s election contracts live while its case is being heard.
These process errors led Pham to support election contracts, which she explained across four press releases:
- Aug. 26, 2022 – Dissent of Review and Stay of Kalshi Political Event Contracts
- June 23, 2023 – Dissent on Prohibiting Kalshi Political Event Contracts
- Sept. 22, 2023 – Statement Abstaining from Vote Against Prohibiting Kalshi’s Political Event Contracts
- Sept. 10, 2024 – Dissent on CFTC’s Appeal after Kalshi’s District Court Victory
Pham supported Kalshi’s August 2022 political event contract submission because she did not believe it violated the Special Rule prohibiting certain types of event contracts.
By the time Kalshi self-certified its political event contracts, the Fifth Circuit had issued an injunction preventing the CFTC from shutting down PredictIt. In her 2023 press releases, Pham noted the Fifth Circuit’s injunction protected PredictIt’s election contracts and argued that it should also prevent the CFTC from blocking Kalshi’s.
In 2024, she objected to the CFTC’s “rushed” vote to appeal its District Court loss rather than wait and reflect on whether it was the correct course of action.
Pham’s belief in the CFTC’s regulatory overreach could signal an era of growth for prediction markets. Based on Kalshi’s listing of sports event contracts, the company seems to believe in Pham’s support and a less confrontational CFTC.