Kalshi sues Louisiana over sports event contract laws

The suit challenges two laws that took effect on 1 August and asks a federal court to block enforcement before the state acts.

Key Takeaways:

• Kalshi filed a federal lawsuit on 23 October in the US District Court for the Western District of Louisiana to block the state from enforcing its gambling laws against its sports event contracts.
• The complaint challenges House Bills 53 and 883, signed in May and effective 1 August 2026.
• Kalshi argues Louisiana lacks authority to regulate products it says are subject to federal oversight.

U.S.- Kalshi has filed a federal lawsuit against Louisiana, asking a court to prevent the state from enforcing its gambling laws against the prediction market operator’s sports event contracts. The complaint challenges House Bills 53 and 883, which were signed into law in May and took effect on 1 August 2026.

Filed on October 23 in the US District Court for the Western District of Louisiana, the lawsuit seeks a temporary restraining order, as well as preliminary and permanent injunctions to prevent potential enforcement action against the company.

Kalshi argues that although Louisiana has classified sports event contracts as illegal gambling, it lacks the authority to regulate products that the company considers to be subject to federal oversight.

Kalshi challenges state authority

The lawsuit follows a series of legal challenges by Kalshi against state efforts to apply gambling laws to prediction markets. The case brings the dispute into the jurisdiction of the US Court of Appeals for the Fifth Circuit, adding another federal court to the ongoing legal battles over whether states can regulate sports-related prediction contracts under their gambling frameworks.

In August, the CFTC ordered Kalshi to continue trading despite New York Attorney General Letitia James’ lawsuit against the prediction platform, invoking its emergency authority powers under the Commodity Exchange Act (CEA), which it says grants it federal authority over contract markets. This comes after a federal judge in New York denied the company’s request for a preliminary injunction against the state gaming regulator on July 7 and rejected its request for protection pending appeal on July 27.

In June, Kalshi filed a complaint against a new law in the state of Minnesota that bans prediction markets from August 1, 2026. SF 3432, which was signed into law by Governor Tim Walz last month, subjects the operation of prediction markets in Minnesota to criminal penalties. In its complaint, Kalshi argues that the law conflicts with the Supremacy Clause of the US Constitution because it attempts to regulate an area that falls under the exclusive authority of the CFTC.

Frequently asked questions (FAQs)

• What does Kalshi want the court to do? Issue a temporary restraining order and preliminary and permanent injunctions to prevent enforcement action against the company.
• Why does the Fifth Circuit matter? The case falls under the US Court of Appeals for the Fifth Circuit, adding another federal appeals court to the dispute over whether states can regulate sports-related prediction contracts.