CFTC and the federal government sue Arkansas to stop its Kalshi lawsuit

The United States and the Commodity Futures Trading Commission sued the State of Arkansas and Attorney General Tim Griffin in federal court on November 12, 2026. The complaint, filed in the U.S. District Court for the Eastern District of Arkansas (No. 4:26-cv-01255), asks a judge to stop the state’s lawsuit against Kalshi and any future Arkansas enforcement against CFTC-regulated exchanges.

Griffin is named in his official capacity. Kalshi is not a party to the federal case.

The state case it targets

Griffin sued KalshiEX LLC and Kalshi Inc. on November 4 in the Circuit Court of Independence County (No. 32CV-26-717). That suit brings claims under the Arkansas Deceptive Trade Practices Act and a common-law unjust enrichment claim, and alleges that Kalshi’s event contracts are illegal gambling offered without a state license. In his announcement, Griffin said “Arkansas law is concerned with substance, not semantics,” and listed the relief sought as restitution, penalties, taxes and an injunction.

The federal complaint quotes the state’s allegations at length, including that thousands of Arkansas residents, some aged 18 to 20, trade on Kalshi and that the company has never paid sales or use taxes in the state.

What the government argues

The suit brings a single 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 Arkansas is targeting are swaps, and that Kalshi is such a market, designated by the CFTC in 2020.

It pleads all three kinds of preemption: express, field and conflict. The laws it names include the deceptive trade practices act, several other state statutes and regulations, and common law, each as applied to event contracts listed on CFTC-regulated exchanges.

The complaint argues the contracts qualify as swaps under three parts of the statutory definition. It points to the state’s own complaint, which it says concedes that “Kalshi’s event contracts are structured as binary options.”

One conflict argument draws on the CFTC’s November 5 interpretation of its impartial access rule, which told exchanges to stop blocking traders by state within 30 days or explain why they cannot. The government argues Arkansas enforcement would force exchanges to break that rule by denying event contracts to Arkansas residents.

The complaint also puts a number on the stakes. It notes that the state law allows civil penalties of up to $10,000 per violation, while Kalshi earns between $0.07 and $2.63 in fees per 100 contracts on most contracts. Per-violation penalties, the government argues, “could reach the hundreds of millions of dollars.”

Relief sought

The government asks for a declaration that Arkansas laws are preempted and invalid as applied to transactions on CFTC-regulated exchanges. It also seeks a preliminary and permanent injunction barring the state, Griffin and their agents from investigating CFTC-regulated entities “and their affiliates and partners” under Arkansas law, or enforcing it against them, for those transactions. It asks for costs and fees.

The complaint is dated November 10 and signed for the CFTC by Senior Assistant General Counsel David W. Rubin, with General Counsel Tyler S. Badgley and other agency lawyers listed. Timothy J. Borgerson, counsel to the Assistant Attorney General, appears for the United States.

Part of a wider campaign

The complaint lists ten earlier federal preemption suits brought against states: Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, Wisconsin and Utah. It states that preliminary injunctions have been entered against state enforcement in Arizona, Illinois and Minnesota.

Arkansas already faces two other federal challenges. Polymarket US and OG.com sued Griffin and state racing commissioners on November 9. Neither exchange says it has been sued by the state; each asks a federal judge to declare Arkansas law preempted.

Unlike those suits, the government’s case asks the court to halt a state case that is already pending. As written, its requested injunction would cover all CFTC-regulated entities and their affiliates and partners, not only Kalshi.

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.