CFTC sues Louisiana as Utah files felony charges against prediction-market executives
The Commodity Futures Trading Commission sued Louisiana on Friday, November 13, becoming the 12th state the agency has taken to court to defend its authority over event-contract trading. Chairman Michael Selig says parallel criminal charges filed by Utah now put prediction-market executives at risk of jail, a sharper escalation than the jurisdictional lawsuits that have defined the fight until now.
- The CFTC sued Louisiana after a state court shut down more than 30 companies there without notice or a hearing.
- Utah filed felony charges against Kalshi and its two cofounders in October; no convictions have followed.
- DefiLlama tracked $6.24 billion in seven-day prediction-market volume as of November 14, 2026, with Kalshi holding $4.54 billion of it.
- $6.24B seven-day volume across 138 protocols DefiLlama tracks
- 12th state CFTC has sued, versus four appeals courts briefed
- 44 state attorneys general who signed the July letter opposing CFTC jurisdiction
According to the CFTC’s statement, Louisiana obtained a state court order that shut down more than 30 companies connected to CFTC-regulated derivatives trading in the state. The agency says the order came without notice or an opportunity to be heard, and it filed suit the next day seeking to preserve the status quo while federal courts resolve the underlying jurisdictional question.
Selig Calls Louisiana’s Order “Naked Lawfare”
The CFTC’s press release quotes Selig directly on the Louisiana action, framing it as a political maneuver rather than a legitimate regulatory response.
Event contracts have traded openly in Louisiana for years, in compliance with the Commodity Exchange Act and CFTC regulations. The Commission’s lawsuit seeks to maintain the status quo while the federal courts decide this issue in an orderly manner.
Michael Selig, CFTC Chairman
Louisiana is now the 12th state the CFTC has sued to protect what it calls its exclusive jurisdiction under the Commodity Exchange Act. The agency has also filed amicus briefs in four federal appeals courts and one state supreme court, a far narrower footprint than the dozen direct lawsuits it has now brought.
Selig Tells CNBC State Charges Risk Jailing Founders
Selig’s remarks on the stakes for individuals, first reported by Cryptopolitan, came during a Friday, November 13, 2026 interview on CNBC at Cantor Convergence. He called the criminal charges brought by states “really egregious” and argued that platforms offering sports-event contracts operate legitimate, federally regulated products rather than illegal gambling.
The flashpoint is Utah, which filed felony charges against Kalshi and its two cofounders in October 2026. No one has been convicted and prosecutors have not specified potential penalties, but the charges carry possible jail time, a step beyond the civil cease-and-desist orders states like Louisiana have favored. Selig said that gap between a regulatory dispute and personal criminal liability should not exist: “That’s not something that should be at the risk of going to jail.”
The CFTC’s enforcement posture extends beyond prediction markets this year. The Justice Department and CFTC separately challenged Arkansas Attorney General Tim Griffin’s action against Kalshi.
44 State Attorneys General Say Congress Never Granted CFTC This Power
In a July 2026 letter, 44 state attorneys general argued that Congress never authorized the CFTC to regulate sports bets as derivatives, since the wagers lack the hedging or price-discovery function that defines a derivative contract. States also have direct financial reasons to resist. The National Conference of State Legislatures cited an American Gaming Association estimate that prediction markets may have diverted betting activity that would otherwise have generated more than $1 billion in state sports-betting tax revenue.
That tax exposure, spread across 44 states, is a far larger coalition than the 12 states the CFTC has sued individually, and it explains why the agency is pursuing a Supreme Court resolution rather than fighting each state separately.
Kalshi’s Supreme Court Response Is Due December 7
Appeals courts have split on the underlying question. The Third Circuit sided with Kalshi, prompting New Jersey officials to petition the Supreme Court on whether the Dodd-Frank Act blocks states from enforcing gambling laws against sports contracts offered on CFTC-registered exchanges.
The Ninth Circuit ruled the opposite way, and the Sixth Circuit denied interim relief without deciding the core legal issue.
Stanford law professor Joe Grundfest expects the Supreme Court to take up the dispute, though the justices have not yet agreed to hear the case. Kalshi’s response in the New Jersey petition is due December 7, 2026, the next concrete deadline in a fight that has otherwise moved state by state and courtroom by courtroom.
Selig maintains the CFTC’s reading of the statute is not in doubt on its end: “Our view on the statute is that we have exclusive jurisdiction over these markets.” The practical effect for platforms in the meantime is a patchwork: compliant in federal court, criminally charged in Utah, and now litigating emergency shutdown orders in Louisiana, with Kalshi carrying $4.54 billion and Polymarket $1.33 billion of the sector’s $6.24 billion in weekly volume exposed to that uncertainty.
The CCS read. A Supreme Court grant would matter more to Kalshi’s balance sheet than any single state order, since it would settle whether 44 state attorneys general can touch federally registered contracts at all. Until then, platforms are pricing in legal risk state by state, and liquidity providers watching Kalshi’s $4.54 billion book should expect compliance costs, not volume, to be the variable that moves first.
The next concrete marker is Kalshi’s December 7, 2026 response in the New Jersey Supreme Court petition, which will show whether the justices are inclined to resolve the Third Circuit and Ninth Circuit split before more states follow Utah’s criminal route.