Louisiana court blocks prediction market operations nationwide

Louisiana restraining order splits prediction markets into two federal courts

District Judge Jeffrey Johnson signed a temporary restraining order against ten prediction market operators on the same afternoon Louisiana Attorney General Liz Murrill filed her lawsuit in the 21st Judicial District Court in Tangipahoa. The speed of that sequence matters. This was not a court skeptical of a novel legal theory — this was a court that had seen enough.

Murrill's suit named Kalshi, Polymarket, Robinhood, Crypto.com, Coinbase, Novig, Underdog, Gemini, ForecastEX, and ProphetX. Johnson's order barred all ten from offering event contracts in Louisiana for ten days without state licenses, covering sports, elections, and awards contracts alike. A preliminary hearing is set for November 30 — the same date, by coincidence or coordination, that Wisconsin and Arkansas matters are also reaching inflection points.

Kalshi did not wait. Within hours of Johnson's order, the company filed for a preliminary injunction in the U.S. District Court for the Western District of Louisiana, arguing that the Commodity Exchange Act grants the CFTC exclusive jurisdiction over swaps and event contracts, and that Louisiana's enforcement action is federally preempted. The CFTC, separately, has made exactly this argument in Arkansas, where the agency filed a 34-page complaint after Attorney General Tim Griffin moved against Kalshi in state court earlier this month. CFTC Chairman Michael Selig said publicly that the agency would defend its sole jurisdiction under the CEA and would not allow state interference to destroy federally regulated markets.

That is now the central wager: whether a CFTC-designated contract market operating under CFTC-approved products can be shut down by state gambling law at all. The reporting treats this as an open question. I don't think it is, at least not at the appellate level where this eventually resolves.

The Sixth Circuit's preemption ruling cut against the platforms in a different factual context, and that result has emboldened states. But the Sixth Circuit was not writing on a clean slate about CFTC-designated contract markets operating under approved filings — it was ruling on narrower grounds. The Louisiana and Arkansas actions are pressing directly on CFTC-designated infrastructure, which puts the CEA's express preemption clause into play in a way the Sixth Circuit analysis did not fully engage. I have watched regulators win on jurisdictional arguments that looked weak in state court and very strong in federal court, because the question changes when the federal statutory scheme is the question rather than the backdrop.

What Murrill's speed signals is state-level confidence that the Sixth Circuit result gives her cover. What Kalshi's simultaneous federal filing signals is that it understands the state court is not where this gets decided.

The two proceedings now run in parallel — Johnson's ten-day clock in Tangipahoa, and the federal injunction motion in the Western District. If the federal court moves before November 30, Louisiana's preliminary hearing becomes a secondary event. If it doesn't, ten operators will be arguing their position before a state judge who already granted a restraining order the same afternoon the complaint was filed.