Louisiana restraining order leaves ten operators in a two-court bind

District Judge Jeffrey Johnson signed the temporary restraining order on a Friday afternoon in Tangipahoa Parish, and by the time the ink was dry, Kalshi had already filed a counter-motion in federal court. That sequence — state court grants, federal court asked to override — is the structure of this fight now, and it is running simultaneously across more jurisdictions than any of these operators budgeted for in January.

Attorney General Liz Murrill's order covers ten operators: Kalshi, Polymarket, Robinhood, Crypto.com, Coinbase, Novig, Underdog, Gemini, ForecastEX, and ProphetX. It prohibits event contracts across every category — sports, elections, awards — for ten days, with a preliminary hearing set for November 30. Murrill's public framing was direct: unlicensed is illegal, and no amount of definitional creativity changes that.

Kalshi's federal filing argues the Commodity Exchange Act grants the CFTC exclusive jurisdiction over swaps and event contracts, and that state law cannot reach conduct the federal regulator has explicitly sanctioned. That argument is not new. What is new is the terrain on which it is being tested. Judge Colleen McMahon in the Southern District of New York recently concluded that Novig's sports contracts are not swaps under the CEA — which means the preemption claim depends entirely on a characterization that at least one federal court has already declined to accept for this product category.

This is where the two-court structure becomes genuinely difficult for the operators. Kalshi's federal injunction bid in the Western District of Louisiana will turn on whether the contracts at issue qualify for CEA preemption. If the court applies McMahon's logic — that sports event contracts fall outside the swap definition — the preemption argument fails at the threshold, and the state restraining order survives. If the court takes a broader view of CFTC jurisdiction, Kalshi gets its injunction and Louisiana's enforcement is paused. Those two outcomes produce directly contradictory precedents, and there is no circuit-level resolution in place to settle them.

The CFTC's posture is the unresolved variable. Kalshi has stated publicly that the agency has "repeatedly explained" that its event contracts are lawful. What the CFTC has not done, on the public record, is intervene directly in state enforcement proceedings to assert that position with binding legal effect. There is a material difference between an agency declining to object to a contract self-certification and an agency filing a brief in Tangipahoa Parish. Whether the Commission is prepared to do the latter — and whether the DOJ, which has already sued Arkansas, would support that posture in Louisiana — is not something the public record currently answers.

The November 30 hearing is the next concrete date. Johnson will decide whether the temporary restraining order converts to a preliminary injunction, which would extend the prohibition through litigation. By then, Kalshi's federal motion will also have been briefed. The two proceedings will run in parallel, in different courts, applying different bodies of law to contracts that have not been uniformly defined.