US authorities intensify action against prediction markets
A Louisiana judge has ordered Kalshi, Polymarket and other prediction-market operators to stop facilitating event contracts in the state, while the US federal derivatives regulator has warned Kalshi of potential enforcement charges.
Judge Jeffrey Johnson signed the temporary restraining order on Thursday after Louisiana Attorney General Liz Murrill sued the operators, alleging their contracts were unlicensed gambling. A preliminary-injunction hearing is scheduled for November 30.
“It’s not complicated: if you aren’t a licensed gaming operator, you aren’t legal,” Murrill said.
Kalshi and Polymarket maintain their contracts are financial products governed by federal regulation. Kalshi’s head of litigation, Jovy Dedaj, defended that position before the Louisiana order was made public.
“The operation of federally-regulated exchanges is the exclusive province of the federal government. Full stop,” Dedaj said.
Kalshi had previously filed a federal suit against Murrill and other state officials, arguing that Louisiana had no authority to regulate its service.
Legal action against prediction-market companies has come from more than a dozen states. Utah filed 14 criminal charges against Kalshi and its co-founders on October 28, following an undercover investigation.
The Commodity Futures Trading Commission (CFTC) is investigating whether Kalshi properly notified it about dozens of proposed products, POLITICO reported, citing an individual with firsthand knowledge of the investigation. The agency’s private warning could lead to charges or a settlement.
Kalshi spokesperson Elisabeth Diana said the warning “is about a procedural error involving the submission of a handful of contracts, many of which weren’t live.”
Kalshi also announced on Thursday that Donald Trump Jr. was no longer a paid adviser. The company said the separation followed increased investment by his firm, 1789 Capital, in rival Polymarket.
