Louisiana judge temporarily blocks prediction-market contracts

A Louisiana state judge has temporarily barred Kalshi, Polymarket, Robinhood and other prediction-market operators from offering event contracts to Louisiana residents, hours after Attorney General Liz Murrill sued the industry over alleged violations of state gambling law.

State District Judge Jeffrey Johnson issued the temporary restraining order on Nov. 12 without hearing the defendants’ arguments. It prevents the operators from facilitating event-contract wagers in Louisiana until Nov. 22, unless the court extends it. A preliminary-injunction hearing is set for 9 a.m. on Nov. 30.

The order covers contracts involving sports and elections. Johnson wrote that the state’s petition alleged unauthorized online gambling and that the companies’ conduct was causing immediate and irreparable harm to Louisiana and its citizens.

Murrill’s petition named 30 corporate entities connected with ten platforms, including Kalshi, Polymarket, Robinhood, ForecastEx, Crypto.com, Coinbase, Novig, Underdog, Gemini and ProphetX. It was filed in the 21st Judicial District Court for Tangipahoa Parish. As we reported on Nov. 12, the state had sought an immediate restraining order, a preliminary injunction and civil penalties over contracts tied to sports, politics, awards and other outcomes.

The state maintains that the platforms are offering gambling without Louisiana authorization. Murrill said that operators not licensed for gaming in the state were acting illegally and could face criminal penalties.

The companies have argued that their products fall under federal commodities regulation. Robinhood said its event contracts are federally regulated by the Commodity Futures Trading Commission and offered through CFTC-registered Robinhood Derivatives. Coinbase called Louisiana’s action an example of fragmented enforcement that Congress intended to prevent through CFTC jurisdiction over event contracts.

The restraining order adds a state-court restriction to a widening conflict over federal and state authority. The CFTC has separately interpreted its impartial-access rules to require designated contract markets to end domestic geographic restrictions that violate those rules within 30 days, or explain why compliance is not feasible. The agency has issued the same deadline for those markets to ensure intermediaries do not impede compliance.

The legal landscape remains unsettled. A September Sixth Circuit ruling held that Kalshi’s sports-related event contracts were not swaps and that the Commodity Exchange Act did not preempt state regulation, while the Third Circuit has reached a different conclusion on federal jurisdiction over swaps. A Freshfields analysis said the Sixth and Ninth Circuits have both concluded that sports-event contracts do not function as traditional risk-hedging instruments.

Louisiana is the 11th state to sue one or more prediction-market operators, according to The Block. The court could extend the temporary order.