The Justice Department and the CFTC sued Arkansas on November 12 to stop its enforcement case against Kalshi.
The same day, a Louisiana judge blocked Kalshi, Polymarket and other event-contract operators in that state, a two-front split that shows states are not backing off prediction markets.
Key takeaways
- The DOJ and CFTC sued Arkansas on November 12 in federal court to stop its enforcement case against Kalshi.
- Louisiana AG Liz Murrill sued Kalshi, Polymarket and operators tied to Robinhood and Coinbase the same day.
- A Louisiana judge issued a 10-day restraining order the same afternoon, with a hearing set for November 30.
- Arkansas AG Tim Griffin sued Kalshi on November 4, seeking penalties of up to $10,000 per violation.
The federal complaint was filed November 12 in the U.S. District Court for the Eastern District of Arkansas and names the state and Attorney General Tim Griffin as defendants. The docket for United States v. Arkansas lists the state as the defendant; Kalshi is not a party. Federal lawyers argue the Commodity Exchange Act gives the CFTC exclusive authority over derivatives traded on designated contract markets, including the event contracts Arkansas targets.
Arkansas moved first. Griffin sued KalshiEX LLC and Kalshi Inc. on November 4 in Independence County Circuit Court, alleging illegal gambling and deceptive business practices. His 57-page complaint brings three claims under the Arkansas Deceptive Trade Practices Act and one unjust-enrichment claim, and seeks an injunction, customer repayment, restitution, unpaid taxes and civil penalties of up to $10,000 per violation. In his announcement, Griffin said the company accepted customers as young as 18 while avoiding licensing, oversight and taxes, and that “Arkansas law is concerned with substance, not semantics.”
A separate case in Louisiana the same day cut the other way. Attorney General Liz Murrill sued Kalshi, Polymarket and operators associated with Robinhood and Coinbase in state court, and later that day Judge Jeffrey Johnson issued a temporary restraining order covering event contracts offered to Louisiana residents without a gaming license. The order runs ten days unless extended, and a hearing on preliminary relief is set for November 30. Murrill announced the order on X, saying she sought an immediate restraining order and an injunction to restore the rule of law in Louisiana.
The two suits land on opposite sides of the same question: whether state gambling law or federal commodities law governs event contracts. CFTC chairman Michael Selig said in October that “Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets.” The Arkansas complaint follows the same preemption approach the agencies used in their earlier suit against Utah. Gaming lawyer Daniel Wallach counted Arkansas as the eleventh state the CFTC has sued over prediction-market oversight, joining Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, Utah and Wisconsin.
Operators are not waiting for the rulings. Polymarket US and OG.com, a prediction-market business associated with Crypto.com, sued Griffin and Arkansas gaming officials on November 9, before the federal case existed. The fight also touches bigger venues: Robinhood and Coinbase were among five operators Ohio already treated as compliant, and Louisiana’s order reaches operators tied to both firms. New Jersey’s separate dispute with Kalshi is pending at the Supreme Court on a petition the justices have not agreed to hear.
The Arkansas federal court has not ruled on the agencies’ request for injunctions. The Louisiana restraining order expires around November 22 unless extended at the November 30 hearing.
