The federal government has sued Louisiana over prediction markets. The Commodity Futures Trading Commission and the US Department of Justice are asking a federal court to void a state order barring event contract platforms from serving Louisiana residents.
Louisiana is pushing back. A day after the lawsuit was filed, Attorney General Liz Murrill publicly accused CFTC Chairman Michael Selig of making false claims. The dispute over prediction markets has moved beyond a polite disagreement about jurisdiction.
How a state court order led to a federal lawsuit
Events moved quickly. On November 12, 2026, Murrill sued approximately 30 entities in state court and secured a temporary restraining order the same day.
The order bars the companies from offering event contracts to Louisiana residents unless they have the gambling licenses required by the state. Event contracts are bets with a regulatory wrapper: traders buy positions that pay out depending on whether a real-world outcome occurs, such as a team winning or a candidate being elected.
The list of defendants includes several major players in the sector: KalshiEX LLC, Polymarket US, Robinhood Markets and Coinbase entities.
On November 13, the CFTC and DOJ responded by suing Louisiana in US District Court. They are seeking to invalidate the restraining order and confirm that these products fall under federal oversight through the Commodity Exchange Act, the law governing US derivatives markets.
Louisiana is the twelfth state the CFTC has sued as it defends its authority over these contracts.
Selig and Murrill trade shots
Selig used forceful language. He called the state's action an attack disguised as enforcement and 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 responded on Saturday. She flatly rejected Selig's account and made a personal criticism of the chairman's relationship with the industry.
“Flatly false statements by the ‘obsequious standard bearer’ for Kalshi and prediction markets.”
Her broader argument is based on states' rights. Murrill emphasized that states have long regulated gambling and cited that history as the basis for Louisiana's authority.
Two hearings are now scheduled. The federal case has a motion hearing set for November 17, while a related state court hearing is scheduled for November 30.
The dispute began before the CFTC entered the case
The platforms were already in court before the federal government joined the dispute. In October 2026, Kalshi and Polymarket US each filed separate federal lawsuits against Louisiana officials.
Both companies argued that federal law preempts state law. This legal principle holds that federal law overrides conflicting state rules when Congress has claimed authority over a field. In this case, that would mean the Commodity Exchange Act takes precedence over state gambling statutes.
Louisiana's November move shifted the dispute from a defensive posture to an offensive one. Rather than wait for the companies' cases to proceed, the state went to its own courts and obtained an order that immediately barred access.
The tension is particularly pronounced over contracts tied to sports and elections. Those are the categories where the distinction between a financial derivative and a wager appears thinnest, and where state gambling regulators are most protective of their authority.
What the dispute means for platforms, traders and regulators
For the companies named in the suit, the immediate concern is access. An order barring Louisiana residents cuts off a market, and the November hearings will determine how long the restriction remains in place.
The defendants also make the case significant for the crypto industry. Coinbase entities and Polymarket US are both named, extending the dispute beyond dedicated prediction platforms to companies with substantial crypto businesses that have expanded into event contracts.
Robinhood's inclusion illustrates how widely the product has spread into mainstream retail brokerage.
The first event to watch is the November 17 federal hearing. Its outcome will shape the November 30 state court proceeding, the pending Kalshi and Polymarket US cases, and how aggressively other states choose to challenge prediction markets.
