CFTC sues Louisiana and Arkansas over prediction market crackdowns
Why it matters
If you offer event contracts or futures to US clients, a federal licence may not yet shield you from state gambling laws. Firms such as Coinbase and Robinhood are caught in the middle until the courts decide.
Post to XThe short version
The US regulator for futures and similar trading, the CFTC, said on 13 November it had sued Louisiana and Arkansas, making them the 11th and 12th states it has taken to court. Both states are trying to stop federally licensed platforms that let people bet on real-world events. The CFTC says only federal law applies to them.
Here's what happened. The Commodity Futures Trading Commission sued Arkansas after the state's attorney general took Kalshi, a CFTC-licensed exchange, to state court on 4 November, calling it an illegal gambling site. The CFTC said Arkansas was seeking civil penalties of up to hundreds of millions of dollars. The Justice Department joined that suit, The Block reported.
Louisiana went further. The CFTC said the state won a court order shutting down more than 30 companies linked to regulated derivatives trading, without giving them a chance to respond. According to The Block, Louisiana's attorney general has sued Kalshi, Polymarket, Robinhood and Coinbase.
Louisiana is the 12th state the CFTC has sued over these markets. Its argument is the same each time: Congress gave it sole control of derivatives under the Commodity Exchange Act, so state gambling laws cannot apply.
CFTC chair Michael Selig called Louisiana's move "naked lawfare and a cynical political stunt". Speaking at a conference, he said some states are now bringing criminal charges against founders, and that he wants the Supreme Court to settle the question.
Where this comes from
- CFTC Sues Louisiana After State Court Blocks CFTC-Regulated Exchanges · CFTC
- CFTC Files Lawsuit Against Arkansas as the Agency Defends its Federal Jurisdiction Over Prediction Markets · CFTC
- DOJ, CFTC sue Arkansas to block state enforcement action against Kalshi · The Block
- CFTC's Selig accuses states of trying to 'lock up' prediction market founders · The Block
Written with AI from the sources above and checked against them before publishing. Here's how we work. This is news, not financial advice. Spotted a mistake? Tell us.
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