CFTC and Kalshi Sue Utah and Louisiana Over Gambling Laws

The Commodity Futures Trading Commission (CFTC) and the prediction market exchange Kalshi have launched separate federal legal battles against Utah and Louisiana to determine if federal law preempts state gambling restrictions. On October 27, 2026, the CFTC sued Utah to block the state from enforcing gambling laws against federally registered prediction markets. This action followed a lawsuit filed by Utah Attorney General Derek Brown on October 20 against Kalshi. Utah is the 10th state the CFTC has challenged since April in a campaign to protect derivatives exchanges from state-level crackdowns.

Simultaneously, Kalshi filed a federal lawsuit on October 23 against Louisiana Governor Jeff Landry, Attorney General Liz Murrill, and state gaming regulators. The dispute centers on whether Kalshi requires a state gambling license to offer sports event contracts. Kalshi argues that as a designated contract market regulated by the CFTC, its operations are preempted by the Commodity Exchange Act and the Supremacy Clause. Louisiana officials maintain that these contracts constitute illegal gambling, citing August laws that allow for fines up to $100,000 and five years in prison per wager.

CFTC Chairman Michael S. Selig has asserted that the agency possesses the sole federal responsibility to oversee these markets. The outcome of these cases may eventually reach the U.S. Supreme Court to resolve the conflict between federal regulatory authority and state gaming licenses.