Kalshi challenges Louisiana officials over enforcement of sports event contracts

Kalshi filed a lawsuit against Louisiana officials on Friday in the US District Court for the Western District of Louisiana, seeking to block enforcement action against its sports event contracts. The company asks for a temporary restraining order and preliminary and permanent injunctions. The defendants are Attorney General Liz Murrill, Governor Jeff Landry, Louisiana Gaming Control Board (LGCB) Chair Christopher Hebert, LGCB Gaming Division Director Dawn Himel and the Louisiana State Police Gaming Enforcement Division.

In its filing, Kalshi contends that Louisiana authorities have signalled plainly that they mean to override federal law by moving against prediction markets. The complaint points to enforcement activity, public remarks and court filings dating from late last year as proof that an action is coming soon, one meant to stop Kalshi from selling event contracts. Among the exhibits is a December 2025 letter in which Hebert told sportsbooks holding LGCB licences that taking prediction-market bets on sports would violate state law and could put their gaming licences at risk.

In that letter, Hebert wrote that it was the board's position that such activities constitute sports wagering under Louisiana law, and noted that state law classifies exchange wagering as sports wagering.

Two more statutes feature in the complaint: House Bills 53 and 883, both effective 1 August 2026, which the governor approved in May. The first of these, HB 883, broadened what counts as gambling by computer and made dual-currency sweepstakes and social gaming platforms criminal. The second, HB 53 or Act 48, raised a number of gambling offences, gambling by computer among them, to racketeering, carrying a maximum of 50 years in prison. Kalshi observed that the Attorney General can seek a temporary or permanent injunction to stop such conduct, and that courts might order websites closed and assets frozen for operators and related firms, among them payment processors, geolocation providers and media affiliates.

The suit maintains that the defendants classify Kalshi's event contracts, which are federally regulated, as gambling by computer without a licence, despite the statute's carve-out for futures, commodities and comparable exchange-traded instruments. Licensed sports wagering under the LGCB, exchange wagering included, is exempt from the prohibition under state law. Kalshi, overseen by the Commodity Futures Trading Commission (CFTC), asserted that Louisiana has effectively threatened to bar it from operating in the state. That position, the company argued, amounts to regulation encroaching on the federal framework, and it added that obtaining a licence would still leave state rules at odds with the Commodity Exchange Act.

Kalshi maintained that such an outcome cannot stand under the Supremacy Clause, and that going to court is its only remaining path, since officials have given no commitment to hold off on applying Louisiana law.

With this filing, prediction-market disputes reach the Fifth Circuit for the first time. In Louisiana, Kalshi's argument rests on field preemption. The company prevailed in Nevada last year on “Congress preemption,” when courts concluded it would likely succeed in arguing that the CFTC regulates it, but the Ninth Circuit rejected that view in September. Utah brought its own suit against Kalshi this month, seeking to ban sports, politics and mention markets; the state's Attorney General said, “Kalshi bet that Utah wouldn’t use its gambling laws,” adding, “Kalshi lost that bet.” In Illinois, Judge Martha Pacold held earlier this month that Kalshi and Coinbase answer to the CFTC rather than the state gaming commission.