Virtually all prediction market operators have been ordered to cease offering sports, election, and award contracts in Louisiana effective immediately, after the state won an emergency temporary restraining order Thursday.
The order was requested by state Attorney General Liz Murrill and issued by the 21st Judicial Court for the Parish of Tangipahoa. It applies to Kalshi, Polymarket US, Robinhood, Crypto.com, Coinbase, Underdog, Novig, ProphetX, ForecastEx, and Gemini.
The judge, Jeffrey Johnson, wrote that “the petition makes clear that defendants are currently violating L.A. R.S. 14.90.3 among other Louisiana laws. The petition also makes clear that defendants’ illegal conduct is immediately and irreparably harming the state in its sovereign capacity, as well as its citizens. The equities and the public interest overwhelmingly warrant immediate relief.”
First industry-wide order
With the order, Louisiana became the fourth state to ban Kalshi’s sports event contracts, joining Washington, Nevada, and Michigan, but the first to win an order that bans all active exchanges that offer sports contracts. There has not yet been a similar order granted in Utah, but most exchanges stopped offering sports contracts there after the state filed criminal charges against Kalshi and its co-founders.
“It’s not complicated: if you aren’t a licensed gaming operator, you aren’t legal,” Murrill wrote on social media site X. “Illegal gambling is a crime and is subject to jail time and significant penalties. Judges all over the country have overwhelmingly called this activity what it is: gambling.
“Kalshi’s and the other operators’ attempts to make up new words to evade state gambling laws, regulators, and taxes are not fooling anyone.”
Louisiana is also the first state to secure a temporary restraining order immediately upon request, with no notice.
Johnson wrote that “no notice is required because the state has shown that immediate and irreparable injury are ongoing – and in all events, defendants immediately received constructive notice of the petition through the media and other outlets.”
Also covers market making
The order is wide-reaching. It does not just ban companies from offering sports event contracts in the state, but also clearing and market making.
It also says that operators must geofence the state. In other states that secured orders bans on sports contracts, it has typically taken a few weeks for prediction markets to implement geofencing.
The temporary restraining order lasts 10 days, meaning it would expire on Nov. 22, but can be extended for another 10. The state is also seeking an injunction that would extend the ban further. A hearing on the motion for an injunction is set for Nov. 30.
CFTC: Platforms should stop geofencing
The order follows an announcement by the Commodity Futures Trading Commission (CFTC) last week that exchanges must stop geofencing states by Dec. 5, or explain why they have no choice but to geofence. The CFTC said that blocking certain states violates its core principle of impartial access.
It is not clear at this point whether the CFTC will accept state-court orders as an acceptable reason to geofence – in the past, the regulator has told Kalshi to disobey orders or potential orders from state courts in Michigan and New York.
Kalshi sued in federal court
Kalshi had tried to prevent a ban by suing in federal court, the U.S. District Court for the Western District of Louisiana, for an immediate temporary restraining order that would prevent the state from enforcing its gambling laws against the business, just hours before the state court granted its order.
Those proceedings are still ongoing but until the federal court makes a decision, the state order is in effect.
Elsewhere, the CFTC sued Arkansas, after the state sued Kalshi in state court. The CFTC lawsuit was filed in the U.S. District Court for the Eastern District of Arkansas Thursday.Â
The CFTC has also sued Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, Utah, and Wisconsin over attempts to enforce gambling laws against prediction markets. Arkansas is only the second state with a Republican governor to be sued by the CFTC over prediction markets.
