The Commodity Futures Trading Commission and the US Department of Justice sued Louisiana in federal court to challenge a state order restricting prediction market platforms. The lawsuit aims to invalidate a temporary restraining order and establish that event contracts fall under federal oversight through the Commodity Exchange Act.
Louisiana Attorney General Liz Murrill filed suit in state court on November 12, 2026, against approximately 30 entities and obtained the restraining order the same day. The order prohibits companies from offering event contracts to Louisiana residents unless they hold state gambling licenses. Event contracts are financial instruments where traders buy positions that pay out based on whether real-world outcomes occur, such as election results or sports outcomes.
The named defendants include KalshiEX LLC, Polymarket US, Robinhood Markets, and Coinbase entities. The CFTC and DOJ responded with their federal lawsuit on November 13.
CFTC Chairman Michael Selig argued that the state's action was an attack disguised as enforcement, stating that event contracts have traded legally in Louisiana for years in compliance with CFTC rules. Murrill rejected this characterization, basing Louisiana's authority on the state's historical regulation of gambling.
The dispute builds on earlier litigation. In October 2026, Kalshi and Polymarket US each filed separate federal lawsuits against Louisiana officials, arguing that federal law preempts state gambling statutes through the Commodity Exchange Act.
Louisiana is the twelfth state the CFTC has sued to defend its authority over prediction market contracts. The underlying tension centers on contracts tied to sports and elections, where the distinction between financial derivatives and wagers appears most ambiguous.
A federal motion hearing is scheduled for November 17, with a related state court hearing set for November 30. The federal proceedings are expected to shape the outcome of state court litigation and influence how other states respond to prediction market platforms.
