KEY TAKEAWAYS
- Louisiana Attorney General Liz Murrill sued 10 prediction market companies including Kalshi and Polymarket in state court Thursday and asked for an immediate restraining order, which was granted on the same day.
- The lawsuit comes weeks after Kalshi and Polymarket filed their own federal lawsuits to stop Louisiana from taking such action.
- It escalates the prediction markets fight in the Fifth Circuit Court of Appeals territory, joining circuits across the country considering the issue.
Louisiana took its fight with prediction markets to its state courts Thursday and won a speedy victory.
Attorney General Liz Murrill announced that she filed suit in Louisiana state court against “Kalshi, Polymarket, and numerous other illegal online gambling operations.” Murrill sought and received an immediate restraining order, and also seeks an injunction.
The TRO lasts 10 days and bars not only sports event contracts, but also bars markets on elections and awards. It also bans accepting any wagers or advertising their products, as well as requiring geofencing to prevent users in Louisiana from participating.
The lawsuit names 10 companies:
- Coinbase
- Crypto.com
- ForecastEx
- Gemini Titan
- Kalshi
- Novig
- Polymarket
- ProphetX
- Robinhood
- Underdog
Louisiana regulators have been among the most active in the U.S. in combating illegal and unregulated online gambling sites. That includes a 2025 Louisiana Gambling Control Board (LGCB) notice declaring sports event contracts illegal gambling.
SBC Americas reached out to Murrill’s office, but did not hear back by the time of publishing.
Former top Louisiana regulator weighs in
Former LGCB Chair and gambling industry consultant Ronnie Jones said prediction markets have spent multiple years building an “impenetrable dam between state regulators and their sports betting products.”
“States have been vigilant at poking holes in that dam and by one count have won almost 90% of court challenges in state and federal venues.” Jones said Thursday. “I suspect at some point, the prediction markets will run out of fingers to poke in the holes.”
He noted current LGCB Chair Christopher Hebert has spearheaded the increased pressure from the state, beginning with last year’s notice and applauded Thursday’s escalation.
“I’m all for poking another hole in the prediction markets’ dam,” Jones said.
Prediction markets coalition calls lawsuit ‘misguided’
The Coalition for Prediction Markets, which represents operators including Coinbase, Kalshi, Robinhood and Underdog, said the state efforts to regulate the industry are “fundamentally misguided.”
“Louisiana’s attack on this industry is a troubling and unlawful attempt to assert state authority over markets governed by federal law that would only cut off people’s access to an important tool for gathering market information, expressing informed views, and hedging risks based on their own expertise,” a spokesperson for the coalition said Thursday.
“That cannot stand. Derivatives markets are not slot machines or predatory sportsbooks that hook losers and ban winners, and efforts to regulate them as such are fundamentally misguided and ultimately amount to protectionism designed to serve entrenched incumbent interests.”
Louisiana answers two lawsuits with its own
Last month, Kalshi sued Murrill, Gov. Jeff Landry and state gaming regulators in the U.S. District Court for the Western District of Louisiana. The company argued that the state showed a “clear intention to violate the Supremacy Clause.”
Following Murrill’s lawsuit, the company filed for a preliminary injunction. A Kalshi spokesperson pointed to the company’s litigators’ post on social media about its lawsuit.
“Earlier today, @Kalshi filed for a preliminary injunction against the State of Louisiana for its unlawful attempt to stop Kalshi from operating in the state. The operation of federally-regulated exchanges is the exclusive province of the federal government. Full stop,” Kalshi Head of Litigation Jovy Dedaj posted on X. “People benefit from free and fair markets. From Wall Street to New Orleans, Kalshi has been hit with anticompetitive litigation designed to take that choice away from them.
“The gaming industry is dead-set on a future where it can use predatory tactics like banning winners and using AI to target its own customers to maximize their losses. We’re proud to fight against that future.”
Polymarket also filed its own complaint last month in the Eastern District of Louisiana. It argued that the Commodity Exchange Act preempts state enforcement and that Louisiana’s licensing system violates the Commerce Clause. Polymarket said a state license is not an option because Louisiana’s 20 sports wagering licenses are reserved for in-state casinos, riverboats and racetracks.
Both companies cited the December 2025 LGCB notice on sports event contracts. They also cited laws passed earlier this year that expanded the definition of “gambling by computer” and upgraded it to a racketeering offense.
Louisiana expands fight to Fifth Circuit territory
Louisiana is now the first state in Fifth Circuit Court of Appeals territory to take prediction market operators to court over the jurisdiction of sports event contracts.
The Fifth Circuit, which covers Louisiana, Texas and Mississippi, had no prediction markets case until the operators sued Louisiana in October. Next door in the Eighth Circuit, Arkansas Attorney General Tim Griffin sued Kalshi last week and is seeking restitution, penalties, taxes and an injunction. That follows Kalshi’s federal suit against Missouri, which sits in the same circuit.
Federal appeals courts remain split on the issue, as the Third Circuit sided with Kalshi, while the Sixth and Ninth ruled against it.
With the split, New Jersey petitioned the U.S. Supreme Court in September to hear its case from the Third Circuit.
