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Louisiana Attorney General Liz Murrill called CFTC Chairman Michael Selig an “obsequious standard bearer” for Kalshi and prediction markets on Saturday. The rebuke follows a federal lawsuit filed Friday, escalating the legal battle between the state and the regulator.
Murrill targeted a post Selig published Friday evening, accusing him of making “flatly false statements” about the agency’s authority over event contracts. She noted that states have regulated gambling for 250 years.
Federal Court Challenge
The Commodity Futures Trading Commission and the United States filed a complaint in the U.S. District Court for the Eastern District of Louisiana on Friday. The move came one day after a state court halted event contract offerings in Louisiana.
The federal suit names Louisiana, Murrill, the Louisiana Gaming Control Board, and the state police’s gaming enforcement division. The CFTC wants the court to declare that state gambling laws are preempted for agency-regulated markets and seeks to bar Louisiana from enforcing the state court’s order.
Selig called the state’s action an “eleventh-hour ’emergency’ lawsuit” and “naked lawfare and a cynical political stunt.” The CFTC noted Louisiana is the 12th state it has sued to defend its exclusive jurisdiction over derivatives markets.
State Order and Market Response
Judge Jeffrey Johnson of the 21st Judicial District Court in Tangipahoa Parish signed an ex parte temporary restraining order Thursday afternoon. The order targets 31 entities, including Kalshi, Polymarket, Robinhood, Crypto.com, Coinbase, Gemini, Interactive Brokers’ ForecastEx, Novig, Underdog, IG Group, and ProphetX.
The ruling bars these companies from offering event contracts on sports, elections, awards, and other events to Louisiana residents without a state license, requiring them to geofence the state. The order expires in 10 days unless extended.
Murrill sued the companies Thursday, making Louisiana the 11th state to sue one or more prediction markets. A hearing on the preliminary injunction is set for 9 a.m. local time on Nov. 30.
Kalshi has cut off Louisiana users. An in-app message tells users, “Your government says you can’t use Kalshi anymore,” claiming the state acted “without a hearing, notice, or due process.” The screen includes a link to “Protect your freedom to trade” and a button to “Join the movement.”
Selig told a conference audience Friday that states were “essentially trying to lock up founders and CEOs” of prediction market firms. He asserted event contracts have traded openly in Louisiana for years under CEA and CFTC regulations.
A Kalshi spokesperson argued that under the court’s logic, interest rate swaps and weather derivatives would be illegal gambling products, illustrating why Congress gave the CFTC exclusive jurisdiction over national financial markets.
Polymarket stated prediction markets are regulated by the CFTC under a federal framework, not state rules. The CFTC said its lawsuit seeks to maintain the status quo while federal courts decide the issue. The agency also noted it and the Justice Department sued Arkansas Thursday to block its enforcement action against Kalshi.
