The Trump administration and Republican Louisiana are publicly clashing over who can regulate prediction markets.
A Louisiana state court on Thursday issued a temporary order blocking prediction sites, such as Kalshi and Polymarket, from operating in the state.
This came after Louisiana’s Republican Attorney General Liz Murrill filed a complaint arguing the companies were offering gambling services without a license.
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“It’s not complicated: if you aren’t a licensed gaming operator, you aren’t legal,” said Ms. Murrill in a Friday statement.
“Kalshi’s and the other operators’ attempts to make up new words to evade state gambling laws, regulators and taxes are not fooling anyone.”
The increasingly popular markets let users trade on yes-or-no outcomes in sports, politics, weather and other areas.
Although the markets are similar to gambling, they’re not treated as gambling by the federal government.
Users set the odds through their transactions, rather than betting on odds set by the house, as in a traditional casino or sportsbook.
The Commodity Futures Trading Commission, which has asserted exclusive oversight of the markets under the Trump administration, filed a lawsuit against Louisiana.
“The state’s eleventh-hour ‘emergency’ lawsuit seeking to shut down the entire prediction market industry is naked lawfare and a cynical political stunt,” CFTC Chairman Michael Selig said in a Friday statement.
“The Commission’s lawsuit seeks to maintain the status quo while the federal courts decide this issue in an orderly manner.”
Louisiana is the 12th state sued by the CFTC “to defend its exclusive jurisdiction over derivatives markets,” Mr. Selig added.
The agency also sued Arkansas for trying to prohibit and penalize prediction markets, with Mr. Selig denouncing the efforts of “the states or their obsequious standard-bearers to destroy federally regulated markets.”
Ms. Murrill fired back at Mr. Selig in a harsh social media post.
“Flatly false statements by the ‘obsequious standard bearer’ for Kalshi and prediction markets,” she said, turning his jab against him. “Gambling has been regulated by states for 250 years.”
Jovy Dedaj, Kalshi’s head of litigation, said on Thursday that the company filed for a preliminary injunction against the Louisiana restraining order.
“The operation of federally regulated exchanges is the exclusive province of the federal government. Full stop,” he said on social media.
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