Kalshi filed a pre-emptive lawsuit against Louisiana on Friday in the US District Court for the Western District of Louisiana. The company argues that state officials showed a “clear intention to violate the Supremacy Clause” through efforts to shut down prediction markets.
Defendants include Attorney General Liz Murrill, Gov. Jeff Landry, Louisiana Gaming Control Board (LGCB) Chair Christopher Hebert, LGCB Gaming Division Director Dawn Himel, and the Louisiana State Police Gaming Enforcement Division.
Kalshi seeks a temporary restraining order and preliminary and permanent injunctions to stop enforcement action against its sports event contracts.
The case brings prediction markets litigation into the Fifth Circuit’s jurisdiction for the first time.
State warnings form the basis of the complaint
Kalshi cited enforcement efforts, public statements and court filings since late last year as evidence that officials “will imminently bring an enforcement action with the intent to bar Kalshi from offering event contracts.”
One exhibit is a December 2025 letter from Hebert to LGCB-licensed sportsbooks, which warned that offering prediction markets on sports breaks state law and may impact their gaming licenses.
“It is the board’s position that such activities constitute sports wagering under Louisiana law,” Hebert wrote at the time.
Hebert also noted that state law classifies “exchange wagering” as sports wagering.
New gambling statutes enter the dispute
The complaint also cited House Bills 53 and 883, which took effect on August 1, 2026, after Gov. Landry signed them in May.
HB 883 expanded the definition of “gambling by computer” and criminalized dual-currency sweepstakes and social gaming platforms. HB 53, also known as Act 48, upgraded several gambling crimes, including “gambling by computer,” to racketeering offenses punishable by up to 50 years’ imprisonment.
Although the laws primarily targeted illegal casinos, sportsbooks and sweepstakes sites, Kalshi noted that “the Attorney General may sue to restrain such conduct by temporary or permanent injunction.”
Courts could also shut down websites and freeze the assets of operators and associated companies, including payment processors, geolocation providers and media affiliates.
According to the suit, defendants treat Kalshi’s federally regulated event contracts as unlicensed gambling by computer, even though the statute exempts futures, commodities and similar instruments traded on an exchange.
Kalshi rules out a state license
State law exempts LGCB-licensed sports wagering, including exchange wagering, from the ban. Kalshi, which is regulated by the Commodity Futures Trading Commission (CFTC), said Louisiana has in effect threatened to ban it from the state.
The company called that stance “a form of regulation that intrudes on the federal scheme” and said that, even with a license, state requirements would be “impossible to reconcile with the [Commodity Exchange Act].”
“The Supremacy Clause does not tolerate that result,” Kalshi said. The suit added that the company “has no option but to seek judicial relief” because officials “have provided no assurance they will refrain from enforcing Louisiana law.”
Legal strategy turns to field preemption
Kalshi relies on field preemption in Louisiana. In Nevada last year, it won on “Congress preemption” after courts decided it would likely win the argument that the CFTC regulates it. However, the Ninth Circuit rejected that position in September.
This month, Utah sued Kalshi and seeks to ban sports, politics, and mention markets. “Kalshi bet that Utah wouldn’t use its gambling laws,” the state’s Attorney General said. “Kalshi lost that bet.”
In Illinois, Judge Martha Pacold ruled earlier this month that Kalshi and Coinbase answer to the CFTC, not the state gaming commission. Kalshi called the ruling “beautiful.”