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CFTC sues Louisiana to undo a state court order that shut 31 prediction-market firms out of the state, and the attorney general fires back
Summary
The Commodity Futures Trading Commission said on Nov. 13 it sued Louisiana to block the state from prohibiting event contracts offered by CFTC-regulated exchanges, brokers and clearinghouses, after a state court order shut down more than 30 companies in the state the day before.
The Block reports the ex parte temporary restraining order, signed by Judge Jeffrey Johnson in Tangipahoa Parish, names 31 entities tied to Kalshi, Polymarket, Robinhood, Crypto.com, Coinbase, Gemini, Interactive Brokers' ForecastEx and others, and requires them to geofence Louisiana.
CFTC Chairman Michael Selig called the state's lawsuit "naked lawfare and a cynical political stunt," and the agency said Louisiana is the 12th state it has sued to defend its exclusive jurisdiction over derivatives markets.
Louisiana Attorney General Liz Murrill answered on X on Saturday, calling Selig the "obsequious standard bearer" for Kalshi and prediction markets and saying gambling has been regulated by states for 250 years, according to The Block.
The order expires after 10 days unless extended, and a hearing on the state's preliminary-injunction request is set for Nov. 30, The Block reports.
Key facts
- The CFTC says Louisiana obtained the state court order without giving the defendants notice or an opportunity to be heard.
- Selig: "The Commission's lawsuit seeks to maintain the status quo while the federal courts decide this issue in an orderly manner."
- The CFTC says it has also filed amicus briefs in four federal courts of appeal and one state supreme court.
- The federal complaint, filed in the U.S. District Court for the Eastern District of Louisiana, names the state, Murrill, the Louisiana Gaming Control Board and the state police's gaming enforcement division, and asks the court to declare state gambling laws preempted for CFTC-regulated markets.
- The order bars the companies from offering event contracts on sports, elections, awards and other events to people in Louisiana without a state license; Kalshi has cut off Louisiana users.
- The Block says Louisiana became the 11th state to sue one or more prediction markets; the suit came a day after the CFTC and Justice Department sued Arkansas over its action against Kalshi.