CFTC Sues Louisiana After State Targets 32 Entities in Event Contracts Dispute
Key Facts
The U.S. Commodity Futures Trading Commission (CFTC) said on November 13, 2026, that it had sued Louisiana to prevent it from banning event contracts offered by entities regulated by the agency. The lawsuit came a day after the state acted in a local court against 32 entities, according to the federal complaint. The agency says contracts traded in Louisiana had operated for years in compliance with the Commodity Exchange Act and its rules. CFTC Chairman Michael Selig said, "Event contracts have been publicly traded in Louisiana for years, in compliance with the Commodity Exchange Act and the Commission's rules." At the heart of the case is whether these contracts fall under the federal agency's regulatory authority or the state's gambling laws.
The complaint says Louisiana sought a temporary restraining order on November 12 without notifying the affected entities or giving them an opportunity to be heard. The order covers, according to the complaint, event contracts tied to sports, elections, award shows and other matters that state law considers sports betting. The agency is seeking a preliminary and permanent injunction barring state officials from enforcing the temporary order or seeking to extend it. That request means the agency is not seeking a final ruling at this stage on the contracts' legal classification, but is seeking to halt the local action while the court dispute continues. The available materials have not announced a resolution or final outcome in the case.
The confrontation stems from a broader dispute over applying gambling laws to event contracts. According to the complaint, Louisiana's gaming regulator issued guidance in December 2025 deeming some sports and other event contracts illegal gambling under state law. Louisiana then enacted Act No. 182 on August 1, 2026, broadening the definition of computer gambling in its criminal code and expanding enforcement powers. The agency's filing says the law allows a fine of up to $100,000 and imprisonment for up to five years for engaging in computer gambling. It also sets a fine of up to $20,000 for anyone who knowingly supports or facilitates the activity.
The agency describes the Louisiana case as part of an escalating battle over regulatory jurisdiction, saying the state is the twelfth it has sued to defend its asserted exclusive authority over derivatives markets. The agency has also filed amicus briefs in four federal appeals courts and one state supreme court. In a parallel dispute, the agency said a federal court issued a preliminary injunction preventing Arizona from using gambling laws to criminally prosecute prediction-market operators. These actions show the dispute extends beyond Louisiana to federal and state courts, where competing interpretations of authority over event contracts are at issue. The Louisiana lawsuit, however, remains tied to the temporary order issued in the state and the entities targeted by that action.
In a separate filing announced on November 13, the agency said Arkansas was pursuing civil action against Kalshi in state court and that it sued Arkansas the same day. The timing of the two cases reflects the widening confrontation between the agency and states over the status of event contracts, with local procedures varying from state to state. EL7 reported on May 26, 2026, that President Donald Trump backed giving the agency exclusive authority to regulate prediction markets, a position that places the current dispute within a broader debate over which federal agency has jurisdiction. A Louisiana court is expected to consider the matter at a November 30 hearing, according to the account in the case filing. The hearing could be the next near-term milestone in determining whether the temporary restrictions will remain in force in the state.