At a glance

  • The Commodity Futures Trading Commission (CFTC) and the United States sued Louisiana on Friday in the US District Court for the Eastern District of Louisiana, seeking to block a state court order that bars CFTC-regulated platforms from offering event contracts, according to the CFTC’s release. It is the 12th state the agency has sued.
  • A state court hearing on a longer-lasting injunction is set for 30 Nov, The Block reported. Louisiana’s attorney general replied to the CFTC chair on Saturday.

Louisiana filed a state-court enforcement action against 32 entities on Thursday 12 Nov, the federal complaint says, and a judge granted an ex parte temporary restraining order, one issued without the defendants being heard first. The CFTC says it covers “more than 30 companies” that deal in CFTC-regulated derivatives, among them exchanges, brokers and clearing houses.

The Block counts 31 entities in the order, including Kalshi, Polymarket, Robinhood, Crypto.com, Coinbase and Gemini. It reported that the order requires them to geofence Louisiana, and that it lapses after 10 days unless the court extends it. Kalshi has cut off Louisiana users, The Block said.

What the complaint says

The complaint names the state, Attorney General Liz Murrill, the Louisiana Gaming Control Board and its members, and the state police gaming division. It argues that event contracts are swaps under the Commodity Exchange Act, and that the act gives the CFTC “exclusive jurisdiction” over them on federally regulated exchanges. Preemption is the legal rule that federal law wins when it conflicts with state law.

It asks the court to declare Louisiana’s gambling law pre-empted for these markets and to bar the state from enforcing or extending the order, The Block reported. Two CFTC-registered exchanges, Kalshi and QCX, had already sued Murrill in federal court, the complaint says.

CFTC Chairman Michael Selig said on X on Friday evening US time that the state’s “’emergency’ lawsuit” was “naked lawfare and a cynical political stunt”.

What Louisiana says

Murrill replied on Saturday at 17:05 UTC: “Flatly false statements by the ‘obsequious standard bearer’ for Kalshi and prediction markets. Gambling has been regulated by states for 250 years.” Her post is the only state response we have seen.

The Block said it had asked Murrill’s office, Kalshi and Polymarket for comment.

Where it sits

The CFTC has already sued Arkansas and Utah on the same theory.

Two CFTC documents pull in different directions here. On 5 Nov it issued an interpretation giving exchanges 30 days to end domestic geographic restrictions or explain why they cannot, as we covered when the agency told prediction market exchanges to stop geofencing states. The Louisiana order, as The Block describes it, demands geofencing.

What happens next

The state court’s hearing on its preliminary injunction request is at 9:00 local time on Monday 30 Nov (15:00 UTC, 16:00 CET), The Block reported. We have seen no federal hearing date and have not checked the docket. The state hearing is the next dated step.

This article is for information only and is not investment advice.