Kalshi and Polymarket US filed federal suits against Missouri and Louisiana on the same day the CFTC sued Utah. The cases push the preemption fight into two states where licensed sportsbooks and casino partners stand to lose business to untaxed competitors.
Two more states now face prediction market operators in federal court. Kalshi’s case targets Missouri, while Polymarket US went after Louisiana. The CFTC filed its own suit against Utah that same day.
Kalshi is challenging a cease-and-desist demand from Missouri. The state told it to pull its sports event contracts or get a state sports betting license. Polymarket US filed as QCX LLC. It named Louisiana’s attorney general and the Louisiana Gaming Control Board as defendants.
Both companies make the same core argument. They say federal commodities law, the Commodity Exchange Act, overrides state gambling enforcement.
Missouri treats event contracts as unlicensed sports wagering
Missouri’s position is direct. The demand to Kalshi came from the office of Attorney General Catherine Hanaway, and Kalshi was not its only target.
The office says that offering sports event contracts in Missouri counts as unlicensed sports wagering. It also holds that federal law does not override state law here. In its view, sports event contracts are not swaps under the Commodity Exchange Act. Companies “cannot repackage sports bets as event contracts” to get around Missouri law, Hanaway said.
The stakes for the licensed market are concrete. Sports wagering became legal in Missouri through Amendment 2. Oversight of the licensed books sits with the Missouri Gaming Commission.
The commission’s July 2026 revenue detail report shows the scale of that business. A prediction market selling sports contracts without a license would pay none of that tax. It would compete for the same customers as the licensed books.
Louisiana’s casino-first licensing faces a federal challenge
Louisiana’s regulated market works differently. Its licenses go first to in-state casinos. Untaxed sports contracts there would compete with those casinos and their sportsbook partners.
The Louisiana Gaming Control Board had already acted on the issue. In December 2025, it sent an advisory on prediction markets and event-based contracts. The advisory went to all sports wagering licensees and platform provider permittees.
That approach targets the licensed side of the market. Polymarket US’s suit now tests whether the state can reach the prediction market operators directly.
The federal regulator has taken a firm public line. The CFTC said Congress made it the only federal regulator responsible for overseeing prediction markets. Its Utah suit seeks to stop the state from using its own laws to shut down CFTC-registered contract markets. It followed civil enforcement actions that Utah brought in state court.
Federal appeals courts are already split on whether state gambling law can reach these contracts. The question is moving toward the Supreme Court. Each new filing adds pressure on states and operators alike.
Missouri’s dispute reaches well beyond Kalshi. Its cease-and-desist letters remain in play for Polymarket, Robinhood, Crypto.com, Novig and Underdog. The outcome could decide whether sports contracts are shut out of Missouri and Louisiana.
Sources
- Louisiana Gaming Control Board Issues Advisory Notice on Prediction Markets to Louisiana Sports Wagering Oper… (Louisiana Gaming Control Board)
- Annual Report – Missouri Gaming Commission (Missouri Gaming Commission)
- Missouri Attorney General Hanaway Orders Unlicensed Prediction Markets To Cease And Desist Unlawful Sports Wa… (Missouri Attorney General's Office)
- CFTC Sues to Block State Enforcement in Utah Amid Ongoing Efforts to Preserve Jurisdiction (Commodity Futures Trading Commission)
The post Kalshi and Polymarket US sue Missouri and Louisiana as CFTC takes Utah to court appeared first on ReadWrite.
