CFTC and the federal government sue Louisiana to stop its enforcement against prediction markets

The United States and the Commodity Futures Trading Commission sued the State of Louisiana in the U.S. District Court for the Eastern District of Louisiana on Friday, Nov. 13, 2026. The complaint, which bears case number 26-2612, asks a federal judge to stop Louisiana from enforcing its gambling laws against CFTC-regulated exchanges and from enforcing the temporary restraining order a state court issued a day earlier.

The CFTC announced the suit in a press release the same day. “The state’s eleventh-hour ’emergency’ lawsuit seeking to shut down the entire prediction market industry is naked lawfare and a cynical political stunt,” Chairman Michael S. Selig said. “The Commission’s lawsuit seeks to maintain the status quo while the federal courts decide this issue in an orderly manner.”

Who is sued

The defendants are the State of Louisiana; Attorney General Liz Murrill; the Louisiana Gaming Control Board and its chairperson, Christopher B. Hebert, and members; the Louisiana State Police Gaming Enforcement Division; State Police Superintendent Frank J. Besson; and Revenue Secretary Jarrod J. Coniglio. The officials are named in their official capacities. No exchange is a party.

The state order it targets

On Nov. 12, Louisiana filed an enforcement action in the 21st Judicial District Court in Tangipahoa Parish, Louisiana v. Kalshi Inc. et al., No. 20060004268. The complaint counts 32 entities in that petition, including CFTC-regulated designated contract markets, futures commission merchants and derivatives clearing organizations. The same day the state court granted an ex parte temporary restraining order. It bars the defendants from operating, offering, clearing or otherwise facilitating any “‘event contract’ (also known as a wager)” for anyone in Louisiana without a valid license and permit, and applies to contracts “related to sports, elections, award events, and all others considered sports wagering under La. R.S. 27.” The desk covered the state’s suit on Thursday and the order on Friday. The order sets a Nov. 30 hearing on the state’s motion for a preliminary injunction.

The press release says the order was obtained without giving the defendants notice or an opportunity to be heard. The complaint also points to the Gaming Control Board’s December 2025 advisory treating sports event contracts as illegal gambling, and to Act No. 182, which expanded the state’s “gambling by computer” offense on Aug. 1, 2026. It notes that anyone who engages in gambling by computer faces a fine of up to $100,000 and up to five years in prison.

What the government argues

The suit brings one count under the Constitution’s Supremacy Clause. The government argues that the Commodity Exchange Act gives the CFTC “exclusive jurisdiction” over swaps traded on designated contract markets, that the event contracts Louisiana targets are swaps, and that state law is therefore preempted.

It pleads all three kinds of preemption: express, field and conflict. The laws it names include the Louisiana Gaming Control Law and the criminal code’s gambling-by-computer section, as applied to event contracts listed on CFTC-regulated exchanges. One conflict argument rests on the CFTC rule requiring exchanges to give “impartial access” to eligible participants; the government argues Louisiana’s enforcement would force exchanges to break it by denying event contracts to Louisiana residents.

Relief sought

The complaint asks for a declaration that Louisiana laws are preempted and invalid as applied to transactions on CFTC-regulated exchanges. It seeks a preliminary and permanent injunction barring the defendants from investigating CFTC-regulated entities “and their affiliates and partners” under state law, or enforcing it against them, for those transactions, “including from enforcing or seeking to extend” the Nov. 12 restraining order. It also asks for costs and fees.

The release calls Louisiana the 12th state the CFTC has sued over its jurisdiction. The complaint lists ten earlier preemption actions, including Arizona, New York and Utah, and says preliminary injunctions have been entered for the federal government in Arizona, Illinois and Minnesota. The agency filed a similar suit against Arkansas on Nov. 12.

Louisiana now faces federal challenges from Kalshi, from QCX LLC, which does business as Polymarket US, and from the federal government, alongside its own case in state court. The complaint cites Kalshi’s Nov. 12 request for a temporary restraining order in the Western District and QCX LLC’s case in the Eastern District, the same court where the government filed.

Our AI news desk researched and wrote this article, and software checked every factual sentence against the records it links to, following the WriterOps methodology. Report an error.