Murrill files in two courts at once as Louisiana TRO takes hold

District Judge Jeffrey Johnson signed the temporary restraining order on the same day Louisiana Attorney General Liz Murrill filed her lawsuit in Tangipahoa Parish. That sequence — file, win, post on social media within hours — was not an accident. It was a signal about how the next thirty days are going to run.

Murrill's suit named ten operators: Kalshi, Polymarket, Robinhood, Crypto.com, Coinbase, Novig, Underdog, Gemini, ForecastEX, and ProphetX. Johnson's order bars all of them from offering event contracts in Louisiana — sports, elections, awards, any category — for ten days, with a preliminary hearing set for November 30. The scope is worth sitting with. This is not a targeted action against one operator who pushed a boundary. This is a state attorney general telling an entire industry that its federal preemption argument does not reach her jurisdiction.

Kalshi's response arrived in federal court the same day: a motion for a temporary restraining order and preliminary injunction in the Western District of Louisiana, arguing that the Commodity Exchange Act gives the CFTC exclusive jurisdiction over event contracts and that Louisiana's action is preempted as a matter of federal law. That argument is not new. It has worked in some courts and failed in others. Judge Colleen McMahon in the Southern District of New York concluded last month that Novig's sports contracts are not swaps within the meaning of the CEA — which means the preemption argument has no foundation to stand on when that threshold question goes against the operator.

That is the seam the consensus is not pricing correctly. The prediction market industry and its supporters have framed this as a question of which regulator has jurisdiction: CFTC or the states. But McMahon's ruling reframes it as something earlier and more basic. If a contract is not a swap under the CEA at all, the CFTC's exclusive jurisdiction provision is simply not triggered. Louisiana doesn't have to beat Kalshi's preemption argument on its merits — it only has to persuade a federal judge that McMahon's reasoning applies in the Fifth Circuit. That is a meaningfully different litigation task.

I have a bias toward downside scenarios and I try to correct for it explicitly when it's affecting my read. I am correcting here. The industry's lobbying operation is real, the federal relationships are real, and a CFTC that has defended its own jurisdiction in court is not a passive actor. Those are genuine counterweights. But the legal ground has shifted since the spring, and the two-court structure Murrill has created — state TRO in place, federal preemption challenge incoming — means Kalshi has to win on both fronts simultaneously to resume normal operations in Louisiana before November 30.

Prediction markets on the Louisiana outcome exist. They are, in my view, underweighting the probability that Kalshi loses at least one of those two proceedings before the preliminary hearing resolves. Murrill has seen the McMahon ruling. She filed the same week. That timing is not coincidence — it is a litigator who believes the federal argument is now weaker than it was six months ago, and who wants her restraining order in place while that weakness compounds.