# Kalshi and Polymarket US Sue States Over Prediction Market Jurisdiction Federal lawsuits challenge state gambling enforcement against federally regulated prediction market event contracts. - **Source:** [ReadWrite](https://brifing.si/source/7a996b61-bc09-4e57-8483-78f2ad9dd914) - **Published:** 2026-10-29 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/2a9ec0f7-1224-46a4-95e1-29815467d071 ## Escalating Federal Legal Battles Kalshi and Polymarket US have initiated federal lawsuits against Missouri and Louisiana, challenging state-level enforcement actions. These filings coincide with the CFTC suing Utah to assert federal jurisdiction. The core conflict centers on whether federal commodities law overrides state gambling regulations regarding prediction markets and event-based sports contracts. ## Missouri Cease-and-Desist Demands Missouri Attorney General Catherine Hanaway issued cease-and-desist orders to multiple platforms, including Kalshi, Robinhood, and Crypto.com. The state maintains that offering sports event contracts constitutes unlicensed sports wagering. Missouri officials argue that companies cannot simply repackage sports bets as event contracts to bypass state laws and avoid local licensing requirements. ## Louisiana Casino-First Licensing Model Louisiana’s regulatory framework prioritizes in-state casinos for sports wagering licenses. The Louisiana Gaming Control Board issued an advisory in December 2025 targeting prediction markets. Polymarket US, operating as QCX LLC, is now challenging the state’s authority to regulate these platforms directly, arguing that federal law preempts local gambling enforcement efforts. ## Economic Stakes for Licensed Books Licensed sportsbooks in Missouri and Louisiana face direct competition from untaxed prediction markets. According to the Missouri Gaming Commission’s July 2026 revenue report, the licensed market generates significant tax income. Prediction markets operating without state licenses avoid these taxes, creating a financial disparity that state regulators are actively seeking to mitigate. ## CFTC Asserting Federal Authority The CFTC has taken a firm stance by suing Utah to prevent state-level interference with federally registered contract markets. The regulator claims Congress designated it as the sole federal authority for overseeing prediction markets. This legal move aims to stop states from using their own statutes to shut down federally approved platforms. ## The Preemption Legal Argument The central legal argument from Kalshi and Polymarket relies on the Commodity Exchange Act. They contend that this federal law supersedes state gambling enforcement. By framing their products as event contracts rather than traditional sports bets, these companies seek to operate under federal oversight while avoiding the restrictive licensing regimes of individual states. ## Wider Industry Impact The dispute extends beyond Kalshi and Polymarket, impacting platforms like Novig, Underdog, Robinhood, and Crypto.com. These companies remain under pressure from Missouri’s cease-and-desist letters. The outcome of these federal cases will determine if prediction markets can continue offering sports-related contracts in states that have already established their own regulated betting markets. ## Path Toward Supreme Court Federal appeals courts currently remain split on whether state gambling laws can reach these specific event contracts. As new filings increase pressure on both states and operators, the issue appears to be moving toward a Supreme Court resolution. This legal trajectory will ultimately define the future of prediction markets in the United States. ## Sources covering this story - https://readwrite.com/kalshi-and-polymarket-us-sue-missouri-and-louisiana-as-cftc-takes-utah-to-court/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._