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Louisiana Attorney General Liz Murrill filed a lawsuit Thursday against ten prediction market platforms: Kalshi, Robinhood, Polymarket, Forecastex, Crypto.com, Coinbase, Novig, Underdog, Gemini and Prophetx. She is seeking an immediate restraining order and an injunction, accusing the platforms of operating illegally in the state. "For too long, they have violated our laws with impunity," Murrill said in a post on X. Louisiana is now the 11th state to sue one or more prediction markets, following Arkansas, Utah and Connecticut. Kalshi preemptively filed an emergency temporary restraining order, anticipating the state court action.
Why it matters
The dispute is fundamentally about jurisdiction. States argue the platforms are running illegal sports betting, dodging state taxes and circumventing tribal gaming agreements. The platforms counter that event contracts are federally regulated derivatives, and the CFTC itself has sued states to assert exclusive jurisdiction. The conflict is escalating into a legal test that could end up before the Supreme Court, with billions of dollars in prediction market valuations hanging on the outcome.
Market impact
Robinhood pushed back within hours, saying its event contracts are offered through CFTC-registered Robinhood Derivatives LLC and are therefore federally regulated. Meanwhile, the CFTC is running its own probes: CNBC reported the agency is investigating whether Kalshi properly disclosed its proposed event contracts, and Reuters reported a separate investigation into whether Polymarket violated its 2022 agreement to block US users from its overseas platform. Until the jurisdictional question is settled, every sports and event market offered to US retail users carries regulatory overhang.
Frequently asked questions
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Why is Louisiana suing prediction market platforms?
Attorney General Liz Murrill alleges the platforms violated state law, primarily by offering sports betting contracts illegally, avoiding state taxes and circumventing tribal gaming agreements. She is seeking an immediate restraining order and an injunction.
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Which platforms are named in the Louisiana lawsuit?
Kalshi, Robinhood, Polymarket, Forecastex, Crypto.com, Coinbase, Novig, Underdog, Gemini and Prophetx are all named as defendants.
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What is the core legal dispute over prediction markets?
States argue the platforms operate illegal, untaxed sports betting. The platforms and the CFTC argue event contracts are federally regulated derivatives, giving the CFTC exclusive jurisdiction over the sector.
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How many states have now sued prediction market platforms?
Louisiana is the 11th state, following Arkansas, Utah and Connecticut among others. The suits are part of a broader state versus federal jurisdictional battle.
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What is the CFTC investigating at Kalshi and Polymarket?
The CFTC is probing whether Kalshi properly informed it about proposed event contracts, and separately whether Polymarket violated a 2022 agreement to ban US users from its flagship overseas platform.
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