CFTC Sues Louisiana to Block State Order Against Prediction Markets

The Commodity Futures Trading Commission and the Department of Justice sued Louisiana in US District Court on November 13, seeking to void a state court order that bars roughly 30 event contract platforms from serving Louisiana residents. The filing turns a state gambling enforcement action into a direct federal-state confrontation over who regulates prediction markets, and it makes Louisiana the twelfth state the CFTC has sued to defend its authority over these contracts.

The sequence moved fast. On November 12, Louisiana Attorney General Liz Murrill filed suit in state court against approximately 30 entities and secured a temporary restraining order the same day. The order blocks the companies from offering event contracts to Louisiana residents unless they hold the gambling licenses the state requires. Event contracts are, functionally, positions that pay out depending on whether a real-world outcome occurs — a team winning, a candidate being elected — wrapped in a derivatives regulatory frame.

The defendant list reads like a sector roster:

• KalshiEX LLC, the exchange at the center of the prediction market boom
• Polymarket US, the American arm of the largest crypto-based prediction platform
• Robinhood Markets, the mainstream retail broker
• Coinbase entities, tying the dispute directly into the crypto industry

The federal complaint has two objectives: invalidate the restraining order and obtain a ruling confirming that event contracts fall under federal oversight through the Commodity Exchange Act, the statute governing US derivatives markets.

What did Selig and Murrill say?

CFTC Chairman Michael Selig did not soften his language. He called Louisiana's action an attack dressed up as enforcement and argued that event contracts have traded legally in Louisiana for years in compliance with CFTC rules. His office's position is that a state cannot use gambling licensing to override a federal regulatory perimeter Congress has already drawn.

Murrill answered a day after the lawsuit landed, on Saturday, rejecting Selig's account outright and taking a personal swipe at the chairman's relationship with the industry. She called his statements "flatly false statements by the 'obsequious standard bearer' for Kalshi and prediction markets," and described the state's effort as "naked lawfare and a cynical political stunt" in the broader exchange over the suit. Her legal argument rests on states' rights: states have regulated gambling for over a century, and Louisiana claims that history gives it authority over products it views as wagers.

What does this change for platforms and traders?

For the named companies, the immediate issue is market access. A restraining order that cuts off Louisiana residents removes an entire state's customer base for the duration of the litigation, and the November hearings will determine how long that lasts. For the crypto sector, the stakes are broader. With Coinbase entities and Polymarket US named, the outcome reaches beyond standalone prediction platforms into firms with substantial crypto businesses that have moved into event contracts. Robinhood's inclusion shows how far the product has spread into mainstream retail brokerage.

The platforms were already in court before the federal government intervened. In October 2026, Kalshi and Polymarket US each filed separate federal lawsuits against Louisiana officials, both arguing federal preemption — the principle that the Commodity Exchange Act overrides conflicting state gambling statutes when Congress has claimed the field. Louisiana's November move shifted the state from a defensive posture to an offensive one: instead of waiting for the companies' cases to play out, it went to its own courts and secured an order that shut the door immediately.

The tension is sharpest around contracts tied to sports and elections, the categories where the line between a financial derivative and a wager looks thinnest, and where state gambling regulators feel most protective of their turf.

The calendar now holds two hearings: a federal motion hearing on November 17, followed by a related state court hearing on November 30. The federal outcome will shape the state proceeding, the pending Kalshi and Polymarket US cases, and how aggressively other states decide to push back.