BATON ROUGE – Kalshi has sued Louisiana officials in federal court seeking to prevent them from using state gambling laws to shut down trading on its federally regulated prediction market, including contracts tied to sporting events.
The complaint, filed in federal court October 23 argues that the federal Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive authority over contracts traded on Kalshi’s exchange, displacing Louisiana’s gambling and sports-wagering laws.
The defendants include Attorney General Liz Murrill, Gov. Jeff Landry, the Louisiana Gaming Control Board and state gaming enforcement officials. Kalshi seeks a declaration that the threatened enforcement violates the Constitution’s Supremacy Clause, along with temporary, preliminary and permanent injunctions protecting the company and its affiliates.
The lawsuit is a preemptive challenge. Kalshi alleges Louisiana officials are preparing to take enforcement action, citing public statements, a gaming board advisory and the state’s participation in related litigation. The complaint does not identify an enforcement proceeding Louisiana has already brought against the company.
“Defendants have provided no assurance that they will refrain from enforcing Louisiana law against Kalshi, and no non-enforcement agreement exists between Kalshi and Louisiana,” the company said in the filing.
At the center of the dispute is whether sports-related event contracts are financial instruments subject to federal oversight or wagers subject to state gambling restrictions. Kalshi describes its products as contracts in which traders take opposing positions on future events, with payments determined by the outcomes. It says customers trade against one another rather than against the exchange.
Louisiana regulators have rejected that distinction, according to the complaint. A December 5, 2025, advisory from the gaming board said it considered “purported sporting event contracts and certain other event contracts as illegal gambling” under state law. The advisory said illegal sports wagering could occur even on an exchange regulated by the CFTC.
The board “sees no defense to offering such activity pursuant to a CFTC license,” the complaint quotes the advisory as saying.
The filing also quotes Gaming Control Board Chairman Christopher Hebert as saying the state was “actively seeking ways to stop this.” Murrill described prediction markets as gambling and warned that activities the state considered illegal could jeopardize a company’s existing gambling license, according to statements reproduced in the complaint.
State officials have also raised concerns about prediction markets accepting participants as young as 18 and offering in-game proposition wagers prohibited in Louisiana, the filing says.
Kalshi argues that Louisiana’s licensing requirements cannot be reconciled with its operation as a national exchange. The complaint cites state restrictions on where wagers may originate and a requirement that servers processing sports wagers be physically located in Louisiana. It also contends that excluding Louisiana customers would conflict with federal requirements for impartial access to its markets.
The company says the stakes include potential criminal penalties, forfeiture and disruption of its payment and technology services. According to the complaint, Louisiana’s computer gambling law carries penalties of up to $100,000 and five years in prison, with each wager treated as a separate violation. The filing also cites enforcement powers that took effect August 1 allowing authorities to seek website removal and account freezes.
The complaint acknowledges divided court decisions over Kalshi’s legal position. It cites a favorable ruling from the 3rd U.S. Circuit Court of Appeals, while noting that the 6th and 9th circuits concluded its sports-event contracts were not, or likely were not, “swaps” under federal law – a central issue in its claim to exclusive federal oversight.
Kalshi said it intended to seek a preliminary injunction and would also request a temporary restraining order unless Louisiana officials agreed not to begin enforcement proceedings while that motion was pending.
A growing number of states – including New York, Utah, Rhode Island, Washington, Wisconsin, Arizona, Connecticut and Illinois – have taken legal or enforcement action against Kalshi. Those actions include civil lawsuits and cease-and-desist orders as well as criminal charges.
Also, 44 state attorneys general have pushed back collectively against prediction markets for bypassing state gambling and consumer protection laws.
The federal Commodity Futures Trading Commission and Department of Justice have simultaneously sued or intervened against several states to defend what the federal government asserts is exclusive federal jurisdiction over these event contracts.
U.S. District Court for the Western District of Louisiana case number 1:26-cv-4476
