Kalshi Pushes to Repeal 1958 Onion Futures Ban for Prediction Markets

Prediction market platform Kalshi is lobbying to repeal a decades-old federal law that bans futures trading on onions — a statute that also happens to restrict the company's ability to offer contracts tied to agricultural commodities and Hollywood box office performance.

The Onion Futures Act of 1958 was passed by Congress after traders executed a brazen scheme to manipulate onion prices, flooding the market with the vegetable to drive futures contracts to near-zero values before cornering supply on the way back up. The resulting legislation made onions the only specific commodity explicitly banned from futures trading under U.S. law — an unusual distinction that has endured for nearly seven decades.

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Because prediction markets operate in a regulatory space that overlaps with futures law, the 1958 statute effectively places onion-related and box office contracts off-limits for platforms like Kalshi. The company has argued that the law is an anachronistic relic that no longer serves a meaningful market-protection purpose and that its repeal would open new categories of contracts for retail and institutional traders alike.

The push reflects a broader effort by Kalshi to expand the universe of events on which Americans can legally place predictive wagers. The company has already secured regulatory approvals to offer contracts on elections and economic indicators, and repealing the onion law would represent another incremental step in normalizing prediction markets within mainstream U.S. finance.

Critics of expanded prediction markets have raised concerns about manipulation risks and the potential for speculative activity to distort underlying industries — echoing, in some ways, the very dynamics that produced the 1958 law in the first place. Continue reading at NYT > Business.