US and CFTC sue Louisiana to block state event-contract restraining order

The United States and the Commodity Futures Trading Commission filed a complaint on November 13 in the Eastern District of Louisiana, No. 2:26-cv-02612, asking the court to declare Louisiana gambling laws preempted as applied to event contracts on CFTC-regulated exchanges and to enjoin a state-court restraining order entered the day before. Defendants include the State of Louisiana, Attorney General Liz Murrill and the Louisiana Gaming Control Board. The complaint asserts a single Supremacy Clause claim. The federal court has not ruled.

The complaint alleges that event contracts are "swaps" under the Commodity Exchange Act and fall within the CFTC's "exclusive jurisdiction" under 7 U.S.C. § 2(a)(1)(A). It says that on November 12 the state sued 32 entities in Louisiana v. Kalshi Inc. et al., No. 20060004268 (Tangipahoa Parish), and that evening obtained an ex parte temporary restraining order barring them from offering event contracts "from, to, or on behalf of any person located in the State of Louisiana without a valid license and permit." AskSpinner previously reported that state petition and order.

Plaintiffs ask the court to bar the defendants from investigating CFTC-regulated entities or enforcing Louisiana law, including the Gaming Control Law and the gambling-by-computer statute, as applied to those markets, and from enforcing or extending the November 12 order. A same-day docket entry titled "Preliminary Injunction AND Temporary Restraining Order" was not in RECAP and is not treated here as a ruling.

In a November 13 press release, Chairman Michael S. Selig called the state's lawsuit "naked lawfare and a cynical political stunt" and said the case "seeks to maintain the status quo while the federal courts decide this issue in an orderly manner." The CFTC called Louisiana the 12th state it has sued over exclusive jurisdiction. See the prediction-market litigation tracker and a similar action against Arkansas.