regulation
CFTC and DOJ sue Louisiana over state ban on Kalshi, Polymarket event contracts
CFTC and DOJ filed in EDLA on Nov 13 to block a Louisiana TRO that bars 31 prediction-market entities, including Kalshi, Polymarket, Robinhood and Coinbase, from serving state residents.
The CFTC and the United States sued Louisiana on November 13 in the U.S. District Court for the Eastern District of Louisiana, asking the court to block a state temporary restraining order that shut 31 prediction-market operators out of the state a day earlier. Defendants are the state of Louisiana, Attorney General Liz Murrill, the Louisiana Gaming Control Board and the state police's gaming enforcement division. The federal motion hearing is set for November 17; the related state court hearing is set for November 30.
What happened
Murrill filed in the 21st Judicial District Court in Tangipahoa Parish on November 12, naming 31 entities: Kalshi, Polymarket, Robinhood, Crypto.com, Coinbase, Gemini, Interactive Brokers' ForecastEx, Novig, Underdog, IG Group and ProphetX, among others. Judge Jeffrey Johnson signed an ex parte TRO the same day, barring them from offering event contracts to Louisiana residents without state gambling licenses. The state treats event contracts as gambling under Louisiana law, which Murrill has argued "has regulated gambling for 250 years."
The CFTC's counter-complaint, filed the next day in federal court, asks the court to declare the state gambling laws preempted by the Commodity Exchange Act as applied to CFTC-regulated markets. CFTC Chairman Michael Selig, per Crypto Briefing, called the Louisiana action "naked lawfare and a cynical political stunt." Murrill, in filings and public statements, has called Selig "the 'obsequious standard bearer'" for Kalshi and prediction markets.
Louisiana is the 11th state to sue one or more of the operators named in the Murrill complaint.
Mechanism
The federal–state collision turns on whether event contracts listed on CFTC-designated contract markets are federally regulated derivatives, which the CFTC alone supervises, or state-regulated gambling, which the states retain jurisdiction over. The CFTC's preemption argument has been pending in parallel litigation in Nevada, New Jersey, Massachusetts and Maryland. The Louisiana suit is the first in which the CFTC has itself brought a federal action against a state rather than defending as intervenor in a private plaintiff's case.
What to watch
- The November 17 federal hearing — the court's willingness to issue a preliminary injunction against enforcement of the state TRO would effectively neutralize the Louisiana action nationwide as a template.
- The Nov 30 state court hearing — whether the TRO is converted to a preliminary injunction against the 31 entities.
- Whether other states in the 11-state coalition move to join or file parallel actions, and whether the CFTC's federal filings expand to those states.
- Kalshi and Polymarket's own appearances — the operators have standing to intervene, and each has ongoing state-by-state litigation of its own.
Context
The Louisiana filing is the sharpest state-federal conflict yet over prediction markets' status under the CEA. CFTC Chair Selig took office in 2025 on an explicit platform of defending the agency's exclusive jurisdiction over event contracts; his use of DOJ as co-plaintiff here signals the agency intends to treat state gambling enforcement against designated contract markets as a federal preemption question it is prepared to litigate in every circuit where a state moves. The 31-entity sweep by Murrill — covering sportsbooks' prediction-market pivots (Robinhood, IG, Interactive Brokers) alongside the dedicated operators (Kalshi, Polymarket) — raises the stakes for the sector's regulatory footprint in 2027.