Litigation involving the legality of event contract trading has spread to another new state in the United States, with a federal court in Louisiana serving as the venue in a new lawsuit that Kalshi filed. The defendants in the case are Louisiana state officials, with Attorney General Liz Murrill as the lead defendant.
The complaint cites comments from Murrill and other defendants characterizing Kalshi’s designated contract market (DCM) as illegal gambling under Louisiana law. Kalshi wants the court to enjoin the defendants from acting on that premise as the same legal questions are reaching a crucial inflection point.
Kalshi tells court that serious threat from Louisiana authorities is imminent
In its Oct. 23, 2026, complaint, Kalshi says that Murrill and others “will imminently bring an enforcement action with the intent to bar Kalshi from offering event contracts.” It provides quotes from Louisiana Gaming Control Board (LGCB) Chair Christopher Herbert, Murrill, and a statement from the LGCB as evidence supporting that belief.
Kalshi’s other supporting arguments are similar to those which it has made in its lawsuits against officials in other states. Those include federal law giving the US Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over event contract trading on its platform and a contention that those contracts are not gambling.
CFTC Commissioner Michael Selig has recently submitted new rules to emphasize that distinction. Kalshi has referred to them in this complaint.
Kalshi points to pending regulations that reinforce its arguments
Selig posted two new rules to the federal register earlier in October 2026 that collectively cover two points of legal contention across the country. The rules together explicitly define event contracts as swaps and state that “casino-style gambling products” are not swaps.
Kalshi’s complaint references these regulations. The brief states that “the CFTC recently promulgated a Notice of Proposed Rulemaking (‘NPRM’) that sets out a detailed federal framework regulating the trading of sports event contracts on DCMs…and exercising its express statutory authority to further define the term ‘swap,’ 15 U.S.C. § 8302(d)(1), the CFTC has since issued an Interim Final Rule, effective immediately, excluding from the ‘swap’ definition casino-style gambling products that are regulated under state law and not traded on an organized exchange.”
The US District Court for the Western District of Louisiana will decide if these arguments hold enough water to enjoin Murrill and others. Kalshi’s history with securing preemptive injunctions is not strong, though.
Could events in Louisiana replicate the ongoing litigation in Utah?
Neither the LGCB nor Murrill have taken any actual enforcement actions against Kalshi or any other companies operating DCMs to date. Kalshi’s description of the harm it could suffer without an injunction is based solely on comments from the defendants.
Louisiana isn’t the first state in which Kalshi has sought preemptive protection from state enforcement. It sued Utah officials earlier in 2026 on the same premise.
The district court in that action found fault with Kalshi’s pleas partially for the very reason that there had been no actual enforcement efforts. The court even had to order the defendants to respond to the complaint.
When they did so, they asked the court for summary judgment in their favor, and the court granted that request. Additionally, the US 10th Circuit Court of Appeals upheld the opinion from the Utah district court on Kalshi’s injunction plea.
There are no indicators that Murrill or the other defendants in Louisiana will similarly respond with a request for summary judgment. However, their inaction to this point could work in their favor if the Utah case serves as precedent.
If Kalshi v. Murrill continues, it could be part of higher courts sorting out the legal issues, too.
US 5th Circuit could finally join the fray as a result of Kalshi v. Murrill
There are 11 federal appellate courts in the US, and only three of those 11 have not yet heard arguments or issued a ruling on a dispute between the CFTC or a prediction market operator and a state government. The 5th Circuit is one of those courts, but Louisiana is within its jurisdiction.
Should Kalshi v. Murrill rise to the 5th Circuit, it could strengthen the arguments that the Supreme Court of the United States (SCOTUS) should weigh in on the legal questions at hand. However, timing is an issue in that context, as three petitions involving two other cases are already before SCOTUS.
The 1st Circuit and 11th Circuit may soon be the only appellate courts that have not been touched by the prediction market debate. Louisiana is now among the states engaged in that dispute.
