CFTC sues Louisiana after judge bars prediction-market firms in emergency order

The Commodity Futures Trading Commission filed suit against the State of Louisiana on 14 November 2026 after a state judge issued a temporary restraining order that names 31 legal entities tied to prediction markets. The CFTC says the state action violates the Commodity Exchange Act and agency regulations and asks a federal court in the Eastern District of Louisiana for preliminary and permanent injunctions to block enforcement of Louisiana's gambling laws against federally regulated event contracts.

Federal filing and the emergency state order

Judge Jeffrey Johnson of the 21st Judicial District Court in Tangipahoa Parish granted an emergency temporary restraining order on Thursday that, according to the CFTC, was issued without advance notice or an opportunity to respond. The state order lists 31 legal entities across 13 brands or corporate groups, including exchanges, brokerages and clearing operations:

• Kalshi: 5 entities

• Polymarket: 5 entities

• Gemini: 4 entities

• Crypto.com: 3 entities

• Underdog: 3 entities

• Robinhood: 2 entities

• Coinbase: 2 entities

• OG.com: 2 entities

• ForecastEx: 1 entity

• Rothera: 1 entity

• Novig: 1 entity

• IG Group: 1 entity

• ProphetX: 1 entity

The CFTC filed a 38-page federal complaint in the Eastern District of Louisiana arguing the state action is preempted by federal law and threatens the agency's exclusive jurisdiction over derivatives traded on federally regulated exchanges. The complaint asks the federal court to enjoin Louisiana from enforcing its gambling statutes against event contracts, including the temporary restraining order.

CFTC's rationale and quoted criticism

Chairman Michael S. Selig characterised Louisiana's enforcement as “naked lawfare and a cynical political stunt” in a public statement and on Twitter. The agency's announcement repeats that event contracts have traded openly in Louisiana "for years, in compliance with the Commodity Exchange Act and CFTC regulations." The CFTC argues state restrictions also conflict with federal impartial-access requirements that prevent federally regulated exchanges from excluding eligible participants based on state residence.

"Event contracts have traded openly in Louisiana for years, in compliance with the Commodity Exchange Act and CFTC regulations," the agency quoted Chairman Michael S. Selig.

"The state’s eleventh-hour 'emergency' lawsuit seeking to shut down the entire prediction market industry is naked lawfare and a cynical political stunt," Selig added.

The complaint highlights penalties in Louisiana's expanded gambling statute that could include fines of up to $100,000 and prison terms of up to five years for certain computer-based gambling violations.

Wider legal context

The regulatory action is the CFTC's twelfth federal suit to defend its jurisdiction over derivatives and came the same day as a separate CFTC lawsuit challenging Arkansas's enforcement efforts. Kalshi and Polymarket US are pursuing their own federal challenges to Louisiana's enforcement, and the Commission says it has filed amicus briefs in four federal appeals courts and one state supreme court as the broader jurisdictional dispute continues.

The CFTC is seeking both preliminary and permanent relief to preserve the status quo while federal courts resolve whether individual states may regulate event contracts on federally regulated exchanges. The agency warned that allowing state-by-state regulation would subject exchanges to multiple, conflicting regimes, undermining a single national framework for derivatives trading.

For the CFTC, the complaint and the requested injunctions aim to prevent Louisiana from applying its gambling laws to event contracts traded on federally regulated exchanges. The agency filed the suit in the Eastern District of Louisiana on 14 November 2026. The state-level temporary restraining order followed the prior-day filing in Tangipahoa Parish.