Securities Regulation Daily Wrap Up, FEDERAL PREEMPTION—W.D. La;.E.D. Mo.: Kalshi sues Louisiana, Missouri over sports-wagering laws, (Oct 29, 2026)

By Suzanne Cosgrove

Kalshi is seeking to block what it says is an imminent Louisiana enforcement action and a Missouri cease-and-desist demand.

KalshiEX LLC has filed separate complaints in federal courts in Louisiana and Missouri seeking to stop state gambling and sports-wagering laws from being applied to event contracts traded on its federally regulated exchange (KalshiEx LLC v. Murrill, No. 1:26-cv-04476 (W.D. La. filed Oct. 23, 2026)) and (Kalshiex LLC v. Hanaway, No. 4:26-cv-1860 (E.D. Mo. filed Oct. 27, 2026)).

The October 23 Louisiana filing by the operator of Kalshi’s prediction-market alleges state enforcement is imminent, while the October 27 Missouri filing challenges a cease-and-desist demand with an October 30 compliance deadline. Each complaint pleads one Commodity Exchange Act preemption count and requests declaratory relief and temporary, preliminary, and permanent injunctions.

The two filings add to other court battles involving Kalshi involving multiple states. The State of Utah Wednesday charged Kalshi with 13 felony and one misdemeanor charges against Kalshi CEO Tarek Mansour and COO Luana Lopes Lara, accusing them of violating the state’s anti gambling laws (State of Utah v. Mansour, AGO No. 9465862 (Oct. 28, 2026)).

Also, this week the CFTC sued the state of Utah and Utah Attorney General Derek Brown in a bid to block Utah’s efforts to shut down CFTC-registered contract markets using state laws, including the Kalshi exchange, which is regulated by the CFTC.

Louisiana action. As for the Louisiana complaint, Kalshi quoted the Louisiana Gaming Control Board as saying the event contracts may be offered in Louisiana only by a state-licensed or permitted entity and that it “sees no defense to offering such activity pursuant to a CFTC license,” a statement which Kalshi says shows Louisiana’s clear intention to violate the Supremacy Clause with respect to the regulation of event contracts.

Kalshi alleges enforcement is imminent and says Louisiana has not provided non-enforcement assurance or agreement. It points to potential fines of up to $100,000 and imprisonment for up to five years for computer-gambling violations, with each wager treated as a separate violation, plus forfeiture consequences.

The complaint also says enforcement tools effective August 1 authorize the attorney general to seek injunctions and courts to order website removal and account freezes.

Kalshi contends Louisiana's in-state wager and server-location requirements conflict with federal duties governing its market. It asks the court to declare the challenged state provisions preempted and to bar their enforcement against its federally regulated market.

Missouri deadline. According to the Missouri complaint, Attorney General Catherine Hanaway sent a September 16 cease-and-desist letter directing Kalshi either to stop Missouri sports-wagering activity or obtain a state license, pay taxes and fees, and stop offering sports wagering to people under 21. The original October 16 deadline was extended through October 30, but Kalshi alleges that Missouri's solicitor general told it on October 27 that the state could not agree to withhold enforcement.

Kalshi alleges no license is realistically available because affiliated licenses are limited to casinos, professional sports teams, or operators, and the two direct mobile licenses were awarded to Circa Sports and DraftKings on April 29. The complaint says the regime imposes a 10 percent wagering tax, bars wagers by people under 21 years old, and authorizes administrative fines up to $50,000 per violation or $100,000 for violations arising from the same occurrence.

Kalshi also challenges Missouri's requirements for state approval of wager types, subjects, and events, arguing that they conflict with federal self-certification and CFTC public-interest review. Kalshi seeks declaratory and injunctive relief against the cited statutes, constitutional provision, and sports-wagering regulations.

Preemption divide. The exchange argues that 7 U.S.C. Section 2(a)(1)(A) gives the CFTC exclusive jurisdiction over swaps traded or executed on a designated contract market and that Kalshi's sports event contracts qualify as swaps. Kalshi says the CFTC designated it as a contract market in 2020 and that it self-certifies contracts before listing.

Both complaints also argue that state-specific exclusions or geographic screening could conflict with CFTC impartial-access and market-disruption requirements.

Companies: KalshiEX LLC

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