US and CFTC sue to block Louisiana’s prediction-market order

The United States and the Commodity Futures Trading Commission sued Louisiana on 13 November, a day after a state judge temporarily restricted prediction-market activity. In their complaint filed in the Eastern District of Louisiana, the federal plaintiffs ask the court to bar the state from enforcing or seeking to extend the order.

The complaint, filed as case 2:26-cv-02612, seeks a preliminary and permanent injunction and a declaration that federal commodities law pre-empts Louisiana law as applied to transactions on CFTC-regulated exchanges. The plaintiffs argue that the contracts at issue are swaps under the Commodity Exchange Act.

What Louisiana’s order covers

Judge Jeffrey Johnson signed the 12 November temporary restraining order in Tangipahoa Parish’s 21st Judicial District Court hours after Attorney General Liz Murrill filed the state’s petition. It bars named defendants from offering, brokering, clearing or otherwise facilitating covered contracts for people in Louisiana without a state licence. It calls for geofencing and covers sports, elections and awards, among other contracts within the order’s scope.

The defendants include KalshiEX, QCX LLC, which operates Polymarket US, ForecastEx and Rothera, as well as entities affiliated with Robinhood, Coinbase, Crypto.com, Novig, Underdog, Gemini and ProphetX. The federal complaint puts both exchange listings and access through brokers and clearing organisations at issue. The CFTC had separately issued its interpretation of impartial access requirements on 5 November.

The state judge issued the order without prior notice to the defendants. It expires ten days after issuance unless extended. The state court set a hearing on Louisiana’s preliminary-injunction request for 30 November at 9 a.m. local time.

Separate federal challenges

Kalshi and Polymarket US had already sued Louisiana officials in separate federal cases. Kalshi’s 12 November motion for temporary relief is in the Western District. QCX’s October suit is in the Eastern District under a separate case number.

Prediction Frontier could not verify a federal ruling on the new complaint or how each platform is handling existing positions or withdrawals in Louisiana.