Louisiana obtained a temporary restraining order against Kalshi, Polymarket, and eight other prediction market operators a few hours after the state attorney general filed a lawsuit accusing the firms of violating state gaming laws.
Attorney General Liz Murrill praised the court’s decision, saying it bans them “from continuing their unlicensed and unregulated illegal gambling in Louisiana.”
Murrill’s lawsuit, which was filed in the 21st Judicial District Court in Tangipahoa, also named Robinhood, Crypto.com, Coinbase, Norvig, Underdog, Gemini, ForecastEX, and ProphetX.
District Judge Jeffrey Johnson granted the temporary restraining order, prohibiting the exchanges from offering event contracts in Louisiana for 10 days without the required state licenses. Johnson’s order includes sports, elections, awards and other contracts.
He also referred to an “event contracts” as “also known as a wager.”
After the judge issued his ruling, Murrill took to social media to remind prediction market operators that if they aren’t a licensed gaming operator, “you aren’t legal.”
“Illegal gambling is a crime and is subject to jail time and significant penalties,” Murrill wrote on X. “Judges all over the country have overwhelmingly called this activity what it is: gambling.”
Murrill stressed that Kalshi’s and other operators’ attempts “to make up new words to evade state gambling laws, regulators, and taxes are not fooling anyone.”
The temporary restraining order expires in 10 days unless Johnson extends it. A preliminary hearing has been scheduled for November 30.
Kalshi immediately responded to Murrill’s lawsuit, filing for a preliminary injunction against the state in U.S. District Court Western District of Louisiana. Kalshi submitted a motion for a TRO and preliminarily enjoining the state from pursuing any action against the company and its affiliates over event contract trading.
In its court filing, Kalshi argued the Commodity Exchange Act (CEA) grants the Commodity Futures Trading Commission “exclusive jurisdiction” over “agreements” and “swaps” traded or executed on those markets.
“The CEA preempts state laws purporting to prohibit the trading of these event contracts on Kalshi,” the lawsuit reads. “Based on recent discussions with representatives of the state of Louisiana, Kalshi believes that the state will initiate an action against Kalshi in state court to restrict Kalshi from operating in Louisiana.
“As a result, Kalshi faces imminent criminal, administrative, and forfeiture exposure, notwithstanding that the CFTC, the federal agency with exclusive jurisdiction over Kalshi’s event contracts, has repeatedly explained that they are lawful,” according to the lawsuit.
Daniel Wallach, a gaming attorney, said Murrill’s decision to file the lawsuit has made prediction market litigation history: “first state to sue virtually the entire industry in one action and first to secure a TRO on the filing date. Bold strategy,” Wallach wrote on X.
Wallach also noted the order prohibits offering, listing, clearing, settling, brokering, and market making of unlicensed event contracts, while banning companies from accepting wagers from Louisiana users or allowing them market access.
Johnson’s decision also required mandatory geofencing to block access in Louisiana and prohibits companies from representing that their event-contract offerings are lawful, licensed, or authorized in Louisiana.
“The sweeping order could also subject market makers to enforcement action,” Wallach wrote. “Though not named as a defendant, a market maker’s active participation could bring it within the injunction’s reach.”
