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Louisiana sued Kalshi, Robinhood and other prediction market operators on Nov. 12, alleging their event contracts constitute illegal online gambling, according to MLQ.ai. The action comes two days after a federal judge in Manhattan ruled that Novig’s sports contracts are not swaps, allowing New York to enforce its gambling law.
Louisiana Attorney General Liz Murrill filed the lawsuit in state court and is seeking an immediate restraining order and an injunction. The allegations cover contracts tied to sports, awards and elections.
“For too long, they have violated our laws with impunity,” Murrill said in a post on X, as reported by MLQ.ai.
Manhattan ruling allows New York enforcement against Novig
The Nov. 10 ruling concerns Novig’s sports contracts. According to MLQ.ai, the federal judge’s determination that those contracts are not swaps allows New York to enforce its gambling law against the operator.
That ruling addresses a central dispute between prediction market platforms and states: whether federal oversight by the Commodity Futures Trading Commission displaces state gambling enforcement. The platforms argue that the CFTC, rather than states, regulates their contracts, including those tied to sports.
PlayNY reported on Sept. 10 that a circuit split had deepened the legal fight over sports event contracts, with New York in the mix.
Operators invoke federal oversight in Louisiana dispute
MLQ.ai, citing The Block, listed 10 defendants in Louisiana’s lawsuit: Kalshi, Robinhood, Polymarket, ForecastEx, Crypto.com, Coinbase, Novig, Underdog, Gemini and ProphetX.
Robinhood said its event contracts are “federally regulated by the CFTC and offered through Robinhood Derivatives, LLC.” Coinbase described the lawsuit as another example of fragmented enforcement that Congress sought to prevent. The Coalition for Prediction Markets called the action “troubling and unlawful.”
Kalshi had already sued Murrill and Louisiana Gov. Jeff Landry in October to prevent them from enforcing gambling laws against it. On Nov. 12, Kalshi filed for an emergency temporary restraining order, saying it believed the state would initiate an action against it in state court.
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Source: As reported by MLQ.ai.
