US and CFTC sue Louisiana to stop its restraining order against prediction markets

The United States and the Commodity Futures Trading Commission (CFTC) sued Louisiana in federal court on Friday, November 13, asking a judge to stop the state from enforcing a state-court restraining order against prediction markets. According to the complaint, the order bars 32 companies, including prediction markets, from offering event contracts to people in Louisiana without a state license and permit. The CFTC announced the suit the same day and published the complaint, filed in the US District Court for the Eastern District of Louisiana.

What happened in Louisiana

On November 12, Louisiana Attorney General Liz Murrill sued Kalshi, Robinhood and other prediction market platforms in state court. According to the federal complaint, the state's petition sought a temporary restraining order without notice to the other side, a preliminary injunction and civil penalties against 32 entities, including exchanges, futures brokers and clearinghouses registered with the CFTC. The case is Louisiana v. Kalshi Inc. et al. in the 21st Judicial District Court in Tangipahoa Parish.

The same evening, the court granted a temporary restraining order without hearing the other side, the complaint says. As quoted there, the order bars the defendants from offering any "event contract" to people in Louisiana "without a valid license and permit," and it covers contracts "related to sports, elections, award events, and all others considered sports wagering" under the state's gaming law.

When she filed the state suit, Murrill said in a post that the platforms "have violated our laws with impunity," The Block reported. Those are allegations, and no court has decided whether the platforms broke Louisiana law. A Robinhood spokesperson told The Block that its event contracts are federally regulated by the CFTC, and Kalshi has challenged the state in federal court (see below). We found no response from Louisiana officials to the federal lawsuit as of November 14.

What the federal government argues

The federal complaint says the Commodity Exchange Act gives the CFTC "exclusive jurisdiction" over swaps traded on exchanges it designates, that event contracts are swaps, and that state gambling laws are therefore preempted when applied to those markets. These are the plaintiffs' arguments, and the court has not ruled on them. Louisiana's gaming regulator, the Louisiana Gaming Control Board, has taken the opposite view: in a December 2025 advisory, it said sports event contracts are illegal gambling under state law, according to the advisory as quoted in the complaint.

CFTC Chairman Michael Selig called the state's suit "naked lawfare and a cynical political stunt" in the agency's release. "The Commission's lawsuit seeks to maintain the status quo while the federal courts decide this issue in an orderly manner," he said.

The complaint also cites Act No. 182, which the complaint says Louisiana enacted on August 1, 2026, and which widened the state's definition of "gambling by computer." Kalshi, a CFTC-regulated prediction market, already has its own federal case against Murrill, in which it asked for a temporary restraining order on November 12, and QCX LLC also has a federal case pending against her, the complaint says.

A widening fight with the states

The CFTC says it has now sued 12 states. On November 13 it announced a similar suit against Arkansas. The Louisiana complaint lists earlier cases against Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, Wisconsin and Utah, and says federal courts have granted preliminary injunctions in the government's favor in Arizona, Illinois and Minnesota.

In a separate case, Coinbase, Kalshi and four other firms asked on November 9 to back the CFTC in a lawsuit over perpetual futures on stocks.

What it could mean for traders

The federal complaint asks the court to stop enforcement of the state order; we could not confirm whether the order is still in force. For users in Louisiana, whether sports and election contracts can be offered there depends on the outcome of the federal case, the state case and the platforms' own lawsuits. We did not find a hearing date in the federal case.