Kalshi sues Louisiana over sports event contracts

Kalshi wants a federal judge to stop Louisiana before the state moves against it. KalshiEX LLC filed a "Complaint for Permanent Injunctive and Declaratory Relief" on 23 October 2026 in the U.S. District Court for the Western District of Louisiana (case 1:26-cv-04476, *KalshiEX LLC v. Murrill et al*). It asks the court to bar state officials from applying Louisiana's gambling laws to the sports event contracts Kalshi lists on its exchange.

An event contract pays out depending on whether something happens, such as a team winning a game. Kalshi offers them on an exchange registered with the Commodity Futures Trading Commission (CFTC), the US federal derivatives regulator. Many states see sports contracts as sports betting under another name and say they should regulate them as such. That disagreement is what this case, and a growing list of others, is about.

Who Kalshi is suing

The defendants are Attorney General Liz Murrill; Dawn Himel, Director of the Attorney General's Gaming Division; Governor Jeff Landry; the Louisiana Gaming Control Board, its chair Christopher B. Hebert and its members; the Louisiana State Police Gaming Enforcement Division; State Police Superintendent Robert Paul Hodges; and Revenue Secretary Jarrod J. Coniglio.

What Kalshi argues

Kalshi's central claim is federal preemption. According to the complaint, the Commodity Exchange Act gives the CFTC "exclusive jurisdiction" over event contracts traded on a federally designated contract market, so Louisiana cannot run a separate gambling regime over the same products. The suit is brought under the Supremacy Clause of the US Constitution, which says valid federal law overrides conflicting state law.

The company also says it "believes" the state "will imminently bring an enforcement action with the intent to bar Kalshi from offering event contracts". That is Kalshi's reading of the threat, not a finding by any court. To support it, the complaint points to:

• an "Advisory Notice Regarding Prediction Markets" that the Gaming Control Board sent to "licensees, permittees, and associated persons" on 5 December 2025. It says such contracts are illegal gambling under Louisiana law and that the board "sees no defense to offering such activity pursuant to a CFTC license";
• remarks in a 12 March 2026 article in The Advocate, cited in the complaint, in which Hebert said "We are actively seeking ways to stop this" and Murrill said "That's gambling";
• amicus briefs Murrill signed against Kalshi in other federal appeals courts.

Why Louisiana's new law matters

Kalshi also points to state law. Louisiana's offence of "gambling by computer" (La. Stat. Ann. § 14:90.3) carries, according to the complaint, fines of up to $100,000 and up to five years in prison. Enforcement tools that took effect on 1 August 2026 (§§ 27:19.1–19.2) let the attorney general seek injunctions, have websites taken down and freeze associated accounts. Kalshi argues the law also reaches businesses that support a platform, such as payment processors, media affiliates and geolocation providers.

In our view, that last point is the practical one. A state does not need to win against the exchange itself to make life hard for it: pressure on the payment and location-check companies behind a platform can have a similar effect long before any court decides who regulates these contracts. SBC Americas links the new powers to two bills Landry signed in May, House Bills 53 and 883.

What has not happened

Louisiana has not taken formal enforcement action against Kalshi. Unlike in some of Kalshi's earlier lawsuits, there has been no cease-and-desist order, Gambling Insider notes. At the time of writing the court docket shows only the complaint, a corporate disclosure statement and proposed summonses, all dated 23 October. There is no ruling, and the state has not yet responded in court.

Kalshi's prayer for relief includes a temporary restraining order and preliminary and permanent injunctions. The complaint says Kalshi will seek a preliminary injunction and will add a request for a temporary restraining order only if the state does not assure it that it will hold off on enforcement. SBC Americas asked Landry, Murrill and the board for comment and did not get a reply.

Why the venue matters

Louisiana sits inside the Fifth Circuit, one of the regional US federal appeals courts. SBC Americas describes the case as the first time the prediction-market litigation has reached Fifth Circuit territory. Nothing is before the appeals court yet. But if the district judge rules and either side appeals, another appeals court would weigh in on a question others have already answered differently.

The complaint itself notes that split. It relies on a Third Circuit decision and on a Ninth Circuit ruling that found preemption while doubting that sports contracts are swaps, and it acknowledges the Sixth Circuit's 25 September 2026 ruling in the Ohio and Tennessee cases, which found that federal law did not override those states' gambling laws. Appeals are pending in several more circuits.

In our reading, Kalshi is choosing the time and the court rather than waiting for Louisiana to choose for it. The exchange has picked up commercial backing this week, including the NBA naming it a preferred prediction-market exchange, but a sponsorship does not settle who regulates these contracts. State regulators keep pushing from the other side, as in New York's court petition over Kalshi subpoenas, Ohio's warning to its licensees and Missouri's cease-and-desist action. For the federal side, see our story on the CFTC's view of casino and sportsbook wagers versus event contracts.

Event contracts on sports carry the same risk of losing money as betting. If it stops feeling like entertainment, use self-exclusion tools and local support services.