CFTC sues Louisiana after state court order hits prediction markets

The U.S. Commodity Futures Trading Commission and the United States filed suit against Louisiana on Nov. 13, a day after a state judge ordered 32 companies tied to event contracts to stop serving anyone located in the state. The federal complaint, filed in the Eastern District of Louisiana as case 26-2612, asks the court to block the state from enforcing that order.

Louisiana is the 12th state the CFTC has sued over who regulates event contracts, according to the agency's release on cftc.gov. The pattern follows the CFTC's lawsuit against Utah last month.

What the Tangipahoa order does

Attorney General Liz Murrill filed a state-court enforcement action on Nov. 12 against 32 entities, among them CFTC-registered exchanges, futures commission merchants and clearinghouses. That evening the 21st Judicial District Court in Tangipahoa Parish granted an ex parte temporary restraining order, meaning the companies had no chance to respond first.

The order bars them from "operating, offering, listing, accepting, clearing, settling, brokering, making a market in, or otherwise facilitating" any event contract for a person in Louisiana without a state license. It covers contracts on sports, elections and award events, the CFTC complaint quotes. Nola.com reported that Judge Jeffrey Johnson signed it and that Kalshi, Polymarket and Robinhood are among the named companies. As of 7 p.m. on Thursday, Kalshi users in the state could still buy contracts, the paper said.

The state has been building toward this. The Louisiana Gaming Control Board called sports event contracts illegal gambling in a December 2025 advisory, and Act No. 182, enacted on Aug. 1, lets the attorney general seek injunctions and freeze bank accounts linked to "gambling by computer." People who facilitate it face fines of up to $20,000 and up to five years in prison, per the complaint.

Two readings of the same contract

The federal case rests on the Commodity Exchange Act. It gives the CFTC "exclusive jurisdiction" over futures, options and swaps on registered exchanges, and the complaint argues event contracts are swaps. The plaintiffs ask for a ruling that Louisiana gambling law is preempted for trades on CFTC-regulated markets and an injunction stopping the state from enforcing or extending the Tangipahoa order.

CFTC Chairman Michael Selig called the state action "naked lawfare and a cynical political stunt" and said the agency wants "to maintain the status quo while the federal courts decide this issue in an orderly manner."

Murrill rejects the premise. "It's not complicated: if you aren't a licensed gaming operator, you aren't legal," she wrote on X after the order, according to Nola.com.

Exchanges had already gone to federal court on their own: Polymarket's U.S. operator QCX LLC in the Eastern District and Kalshi in the Western District, the complaint shows. Louisiana is not the only state escalating, either: Utah went further with criminal charges against Kalshi. For exchanges, a state-by-state carve-out is awkward after CFTC guidance on geographic access limits told DCMs to drop domestic geographic restrictions.

The CFTC has also filed amicus briefs in four federal appeals courts and one state supreme court on the same question.