Kalshi Sues Louisiana as New York Takes It to Court Over Unanswered Subpoenas
Kalshi has filed a pre-emptive federal lawsuit to stop Louisiana enforcing its gambling laws against the prediction market, days after New York's gaming regulator asked a Manhattan court to force the company to hand over records on its sports contracts, its under-21 users and its advertising.
- Kalshi sued Louisiana on 23 October in the US District Court for the Western District of Louisiana, the first prediction market case to reach the Fifth Circuit's territory.
- Louisiana has not taken formal action against Kalshi, but the company says state officials have made clear they consider its contracts illegal and that enforcement is imminent.
- In New York, the Gaming Commission says Kalshi has "flatly refused" to produce documents requested in subpoenas issued on 31 July, as it weighs civil penalties.
The two cases add to a fast-growing list of legal fights over whether states can apply their gambling laws to sports event contracts traded on exchanges regulated by the Commodity Futures Trading Commission (CFTC). Last week Utah sued Kalshi in state court seeking up to $61.2 million, and Polymarket US has sued Ohio over its licensing rules.
Why Kalshi Sued Louisiana First
Louisiana has not sent Kalshi a cease-and-desist order or started enforcement proceedings, Gambling Insider reported. Kalshi has sued first before, in Utah and Iowa, and says it faces the same threat here.
The complaint names Attorney General Liz Murrill, Governor Jeff Landry, Louisiana Gaming Control Board chair Christopher Hebert, Gaming Division director Dawn Himel and the State Police Gaming Enforcement Division, SiGMA reported. Kalshi is seeking a temporary restraining order and preliminary and permanent injunctions.
It points to a December 2025 letter from Hebert warning licensed sportsbooks that offering sports prediction markets could breach state law and affect their licences, and to Murrill calling prediction markets "gambling" and vowing to "make sure that our laws are respected and enforced". The board has said it "sees no defense to offering such activity pursuant to a CFTC license", according to the complaint.
Louisiana's New Gambling Laws
Kalshi's complaint leans heavily on laws that took effect on 1 August. House Bill 883 widened the offence of "gambling by computer" and criminalised dual-currency sweepstakes, while House Bill 53 toughened penalties for several gambling offences, classing some as racketeering. The attorney general can now seek court orders to take down websites and freeze bank accounts linked to illegal gambling.
Kalshi says it faces fines of up to $100,000 and up to five years in prison for some offences, and argues that the law's own exception for trades in stocks, futures and commodities through exchanges should cover its contracts. It also cites the CFTC's recent proposal to classify sports event contracts as swaps.
New York Wants the Documents
In New York, the State Gaming Commission, represented by Attorney General Letitia James's office, filed a petition in the State Supreme Court in Manhattan that was logged on 22 October. It asks the court to enforce subpoenas issued on 31 July covering four areas: Kalshi's sports event contracts, products offered to New Yorkers under 21, advertising that describes its products as wagers or bets, and its ownership and corporate structure.
The age question matters because New York's licensed sportsbooks can only take customers aged 21 and over. The commission says it needs the records to "determine whether to issue civil penalties against Kalshi and others", and accuses the company of having "operated a massive enterprise in New York designed to enable individuals to place wagers". Kalshi had not responded publicly to the petition.
The petition follows a July ruling in which a federal judge refused Kalshi's request for an injunction against the commission, and a separate lawsuit filed by James and Governor Kathy Hochul on 31 July accusing Kalshi of running an unlicensed gambling operation.
Is Kalshi Legal?
Kalshi is legal at federal level: it is a CFTC-designated contract market and operates nationwide. Whether its sports contracts can be offered in a particular state is now a question for the courts.
The Third Circuit sided with Kalshi in New Jersey, while the Sixth Circuit and the Ninth Circuit ruled the other way. Massachusetts, Michigan, Nevada, New York, Utah and Washington have won rulings against Kalshi offering sports event contracts, Legal Sports Report reported. New Jersey has asked the US Supreme Court to settle the question, and Louisiana now brings the dispute to the Fifth Circuit for the first time.
The pressure is not slowing Kalshi's commercial growth. On Monday the NBA named Kalshi and Polymarket its preferred prediction markets. Louisiana's sportsbooks face their own scrutiny too: DraftKings and FanDuel are the targets of a proposed class action in New Orleans over AI-driven marketing and VIP programmes.
