CFTC sues Louisiana over order blocking prediction markets

The Commodity Futures Trading Commission and the United States have sued Louisiana to stop enforcement of a state-court order that blocked prediction-market companies from offering event contracts to residents without state gambling licences.

The complaint, filed Nov. 13 in the U.S. District Court for the Eastern District of Louisiana, asks for a declaration that Louisiana gambling laws are pre-empted for CFTC-regulated markets. It also seeks to bar the state from enforcing or expanding the temporary restraining order.

The federal case names Louisiana, Attorney General Liz Murrill, the Louisiana Gaming Control Board and the state police gaming-enforcement division. The CFTC said the state action intruded on Congress’s federal regulatory system for commodity derivatives and that it was seeking to preserve the status quo while courts decide the jurisdictional issue.

As we reported on Nov. 12, Judge Jeffrey Johnson issued the ex parte restraining order hours after Murrill filed the state case. It covers 31 entities connected to prediction-market platforms, including Kalshi, Polymarket US, Robinhood and Coinbase-related companies, and requires them to geofence Louisiana unless they have the required state licences.

The order applies to contracts tied to sports, elections, awards and other real-world outcomes. Such contracts pay according to whether a specified event occurs. Louisiana has characterised the products as unlicensed gambling, while the CFTC maintains that designated contract markets may list federally regulated derivatives without complying with conflicting state gaming rules.

According to the CFTC, event contracts had traded openly in Louisiana for years in compliance with the Commodity Exchange Act and agency regulations. It said Louisiana was the 12th state it had sued to defend what it describes as its exclusive jurisdiction over derivatives markets, after also filing amicus briefs in four federal appeals courts and one state supreme court.

Murrill rejected CFTC Chair Michael S. Selig’s description of the state case as “naked lawfare” and a political stunt. She said gambling had been regulated by states for 250 years and argued that operators lacking a gaming licence were operating illegally.

The dispute comes as the CFTC is considering a proposed rule on event-contract derivatives, including contracts involving gaming. The agency’s June proposal said trading volume across CFTC-registered prediction markets exceeded $25 billion in 2025.

A hearing in the federal case was set for Nov. 17. Louisiana’s hearing on a preliminary injunction in its state case is set for Nov. 30; the restraining order lasts 10 days unless extended.