Kalshi Pushes to Repeal 1958 Onion Futures Ban for Prediction Markets
A Depression-era law banning onion futures trading now blocks modern prediction markets. Kalshi wants it gone.
Prediction market startup Kalshi is lobbying to repeal a decades-old federal law that bans trading on onion prices and box office receipts, arguing the 1958 statute stands as an outdated barrier to a new generation of financial instruments.
The Onion Futures Act was passed by Congress following a brazen scheme in the 1950s in which traders attempted to corner the onion market, driving prices into extreme volatility and sparking political outrage. The law made onions the only commodity in the United States explicitly prohibited from futures trading — a distinction the vegetable still holds today.
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Under current regulatory interpretation, that prohibition also extends to prediction markets, which allow participants to bet on the outcome of real-world events. Box office receipts fall under the same restriction, limiting the scope of contracts that platforms like Kalshi can legally offer to customers.
Kalshi's push reflects a broader tension in financial regulation: rules written for mid-twentieth-century commodity pits are increasingly colliding with technology-driven markets that operate in real time. The company has argued that modern prediction markets serve a price-discovery function similar to traditional futures, and that the onion carve-out serves no contemporary regulatory purpose.
Whether Congress will take up the repeal remains uncertain, but the campaign underscores how a niche agricultural scandal from more than six decades ago continues to shape the boundaries of American financial markets. Continue reading at NYT > Business.
