CFTC sues Louisiana to block order shutting out prediction markets

The federal government has sued Louisiana over prediction markets. The Commodity Futures Trading Commission and the US Department of Justice want a federal court to void a state order that blocks event contract platforms from serving Louisiana residents.

Louisiana is not taking it quietly. A day after the lawsuit was filed, Attorney General Liz Murrill publicly accused CFTC Chairman Michael Selig of making false claims. The fight over prediction markets is no longer a polite disagreement about jurisdiction.

How a state court order became a federal lawsuit

The sequence moved quickly. On November 12, 2026, Murrill filed suit in state court against approximately 30 entities and won a temporary restraining order the same day.

That order bars the companies from offering event contracts to people in Louisiana unless they hold the gambling licenses the state requires. Event contracts are bets with a regulatory wrapper: traders buy positions that pay out depending on whether a real-world outcome happens, such as a team winning or a candidate being elected.

The defendant list reads like a who’s who of the sector. It includes KalshiEX LLC, Polymarket US, Robinhood Markets and Coinbase entities.

On November 13, the CFTC and DOJ responded by suing Louisiana in US District Court. Their goal is twofold: invalidate the restraining order, and confirm that these products fall under federal oversight through the Commodity Exchange Act, the law that governs US derivatives markets.

Louisiana is the twelfth state the CFTC has sued to defend its authority over these contracts.

Selig and Murrill trade shots

Selig did not soften his language. He called the state’s action an attack dressed up as enforcement, and he argued that event contracts have been trading legally in Louisiana for years in compliance with CFTC rules.

“Naked lawfare and a cynical political stunt.”

Murrill answered on Saturday. She rejected Selig’s account outright and took a personal swipe at the chairman’s relationship with the industry.

“Flatly false statements by the ‘obsequious standard bearer’ for Kalshi and prediction markets.”

Her broader argument rests on states’ rights. Murrill stressed that states have long regulated gambling and pointed to that history as the basis for Louisiana’s authority.

The calendar is now set for a double feature. The federal case has a motion hearing scheduled for November 17, while a related hearing in state court is set for November 30.

A fight that started before the CFTC showed up

The platforms themselves were already in court before the federal government joined. In October 2026, Kalshi and Polymarket US each filed separate lawsuits in federal court against Louisiana officials.

Both companies argued federal preemption. That is the legal principle that federal law overrides conflicting state rules when Congress has claimed a field, which in this case would mean the Commodity Exchange Act trumps state gambling statutes.

Louisiana’s November move escalated things from a defensive posture to an offensive one. Instead of waiting for the companies’ cases to play out, the state went to its own courts and secured an order that immediately shut the door.

The underlying tension is especially sharp around contracts tied to sports and elections. Those are the categories where the line between a financial derivative and a wager looks thinnest, and where state gambling regulators feel most protective of their turf.

What this means for platforms, traders and regulators

For the companies named in the suit, the immediate issue is access. A restraining order that blocks Louisiana residents cuts off a market, and the outcome of the November hearings will determine how long that lasts.

The defendant list also matters for the crypto industry. With Coinbase entities and Polymarket US both named, the outcome reaches beyond standalone prediction platforms and into firms with significant crypto businesses that have moved into event contracts.

Robinhood’s inclusion shows how far the product has spread into mainstream retail brokerage.

Watch the November 17 federal hearing first. Whatever happens there will shape the November 30 state court proceeding, the pending Kalshi and Polymarket US cases, and how aggressively other states decide to push back on prediction markets.