Louisiana Wins Temporary Ban Against Prediction Markets
The State of Louisiana obtained a court order temporarily banning ten prediction market operators, including Kalshi and Polymarket, from offering contracts in the state. On the same day, the U.S. Commodity Futures Trading Commission (CFTC) sued Arkansas, challenging its authority to regulate federally supervised exchanges.
Louisiana Attorney General Liz Murrill filed a lawsuit in the 21st Judicial District Court in Tangipahoa Parish against Kalshi, Polymarket, Robinhood, Coinbase, Crypto.com, Underdog and other operators. The suit claims the companies have been conducting illegal gambling without a state license. The same day, the court issued a temporary restraining order.
Judge Jeffrey Johnson's order bars the operators from offering event contracts in Louisiana for ten days without a license. The ban covers not only sports contracts but also contracts on elections, awards and other outcomes. The companies are required to geographically block access to these contracts for state residents. The preliminary hearing is set for November 30. The state is also seeking damages, disgorgement of profits and civil penalties.
Kalshi had sued Louisiana officials in advance in late October. On Thursday, the company filed an emergency motion for a temporary restraining order and a preliminary injunction in federal court. Kalshi argues that its contracts are derivatives regulated under the Commodity Exchange Act and that the CFTC has exclusive jurisdiction over transactions on its exchange.
The CFTC, on the same day, sued Arkansas in an attempt to halt the state's enforcement efforts against Kalshi. Separately, it was reported that Kalshi has ended its advisory relationship with Donald Trump Jr. and is in talks for a new funding round.
The Louisiana case could serve as a precedent in the legal battle between states and prediction markets.
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