TheBlock
The CFTC sued Louisiana in federal court on Friday, asking judges to block a statewide order that bars Kalshi, Polymarket and 29 other prediction market operators from offering event contracts to residents without a state license. The move drew an immediate attack from state Attorney General Liz Murrill, who accused CFTC Chairman Michael Selig of making "flatly false statements" and called him the "obsequious standard bearer" for Kalshi and the prediction markets industry. Louisiana is the 12th state the agency has sued to defend its claimed exclusive jurisdiction over derivatives markets.
Why it matters
The case is a direct collision between 250 years of state-regulated gambling and the CFTC's claim of exclusive federal oversight of event contracts. Judge Jeffrey Johnson signed an ex parte temporary restraining order Thursday naming 31 entities tied to Kalshi, Polymarket, Robinhood, Crypto.com, Coinbase, Gemini and Interactive Brokers' ForecastEx, among others. The order bars them from offering event contracts on sports, elections and awards in Louisiana without a state license and requires geofencing. Kalshi has already cut off Louisiana users, telling them in-app that the state acted "without a hearing, notice, or due process."
Market impact
The TRO expires in 10 days unless extended, and a hearing on the state's preliminary injunction motion is set for Nov. 30. The CFTC and the Justice Department also sued Arkansas on Thursday to block its enforcement action against Kalshi, signaling coordinated federal pushback. Selig said the lawsuit "seeks to maintain the status quo while the federal courts decide this issue in an orderly manner," and told a conference audience that states were "essentially trying to lock up founders and CEOs" of prediction market companies. The outcome will determine whether the sector faces a patchwork of state licenses or a single federal regime.
Frequently asked questions
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Why did the CFTC sue Louisiana?
The agency sued in the U.S. District Court for the Eastern District of Louisiana to block enforcement of a state court order shutting prediction markets out of the state. It is asking the court to declare state gambling laws preempted for CFTC-regulated markets, and Louisiana is the 12th state it has sued over the…
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Which companies does the Louisiana restraining order cover?
The order names 31 entities tied to Kalshi, Polymarket, Robinhood, Crypto.com, Coinbase, Gemini, Interactive Brokers' ForecastEx, Novig, Underdog, IG Group and ProphetX. It bars them from offering event contracts on sports, elections, awards and other events to Louisiana users without a state license.
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How long does the Louisiana restraining order last?
The ex parte temporary restraining order signed Thursday by Judge Jeffrey Johnson expires after 10 days unless the court extends it. A hearing on the state's motion for a preliminary injunction is set for 9 a.m. local time on Nov. 30.
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What did Louisiana AG Liz Murrill say about CFTC Chairman Michael Selig?
Murrill accused Selig of making "flatly false statements" and called him the "obsequious standard bearer" for Kalshi and prediction markets on X. She argued that gambling has been regulated by states for 250 years, replying to Selig's claim that event contracts had traded openly in Louisiana in compliance with federal…
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Has Kalshi stopped serving users in Louisiana?
Yes. Kalshi has cut off access for Louisiana users, and an in-app message tells them "Your government says you can't use Kalshi anymore," stating the state acted "without a hearing, notice, or due process." The screen links to a petition-style campaign to defend trading access.
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