Louisiana sues 12 prediction-market companies over event contracts

Louisiana Attorney General Liz Murrill has sued 12 prediction-market and trading companies, alleging they offered unlicensed gambling through contracts tied to sports, entertainment, awards and elections. The state is seeking an immediate temporary restraining order, a preliminary injunction and civil penalties in an effort to halt the offerings for Louisiana users.

The petition was filed in the 21st Judicial District Court for Tangipahoa Parish. It names Kalshi, Polymarket US, ForecastEx, Novig, ProphetX, Robinhood, Coinbase, Crypto.com, Gemini, Underdog, North American Derivatives Exchange and IG Group Holdings.

Murrill said the companies had violated Louisiana law “with impunity” and that the requested court order was intended to restore the rule of law in the state. The case alleges their event contracts amount to unlicensed sports betting and gambling under Louisiana law.

The petition cited markets on outcomes beyond sports, including control of the Senate, the next White House press secretary, Oscar winners, Federal Reserve interest rates and college football championships. Louisiana’s 2025 Gaming Control Board advisory had concluded that sports event contracts constitute gambling under state law.

The suit follows Louisiana legislation enacted this year that expanded definitions and penalties for unauthorized gambling. Laws that took effect in August allow fines of up to $100,000 and prison terms of as long as five years per illegal wager for companies, as well as potential website takedowns and frozen bank accounts.

Kalshi responded by asking the U.S. District Court for the Western District of Louisiana to temporarily restrain and preliminarily bar the state from proceeding against it and its affiliates over event-contract trading. As we reported in October, Kalshi had already brought a pre-emptive federal challenge to Louisiana’s enforcement of its gambling laws against the company’s sports contracts.

The company argues that the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive authority over event contracts. Robinhood likewise said its contracts are offered through its CFTC-registered affiliate, Robinhood Derivatives LLC, while Coinbase called the Louisiana action fragmented enforcement as federal appellate courts consider related questions.

That argument has had support in one federal appeals court. The Third Circuit upheld a preliminary injunction preventing New Jersey from enforcing state law against Kalshi’s sports-related contracts, finding that Kalshi had shown a reasonable likelihood of establishing that federal law pre-empts the state regime. The court held that the contracts were swaps traded on a CFTC-licensed designated contract market and thus fell within the agency’s exclusive jurisdiction.

The CFTC withdrew its proposed event-contract rule and related staff advisory in February, saying it did not intend to issue final rules on the proposal. Separately, the agency has been investigating whether Kalshi properly notified it of some proposed contracts, including weather-related ones. Kalshi characterized that matter as a procedural issue involving a handful of contracts, many not live, and said it was addressing it.

Louisiana is the 11th state reported to have sued one or more prediction-market operators. A separate count found active enforcement actions in at least 12 states, a broader measure that includes actions other than lawsuits.