Louisiana Warns Sportsbooks to Avoid Prediction Markets
Louisiana's gaming regulator has cautioned licensed sportsbooks that offering or facilitating access to prediction markets that offer sports contracts could violate state law and potentially jeopardize their gaming licenses.
In a letter dated Dec. 5, Louisiana Gaming Control Board (LGCB) Chairman Christopher Hebert discussed how some Louisiana sports betting operators may be considering offering event-based contracts tied to athletic outcomes. He wrote that any activity that allows individuals to stake value on the outcome of a sporting event outside a licensed sportsbook constitutes illegal gambling in Louisiana.
Hebert emphasized that the LGCB holds exclusive regulatory jurisdiction under the Louisiana Gaming Control Law, the Louisiana Criminal Code, and other state statutes. He said contracts related to sports wagers meet the state's definition of gambling and noted that state law categorizes "exchange wagering" as a form of sports wagering.
The board cited contracts based on the full or partial outcome of any athletic event as an example of what falls under its authority. Instead, residents should continue to take advantage of Louisiana sportsbook promos.
Hebert added that sports-linked event contracts remain illegal gambling even if offered on exchanges regulated by the Commodity Futures Trading Commission (CFTC). Platforms such as Kalshi and Crypto.com fall into that category, although Hebert said that if an entity met all state licensing requirements for sports wagering, the assessment would differ.
One of the biggest prediction market apps, Kalshi, has continued to argue in court that CFTC oversight preempts state regulation. Still, Hebert noted that CFTC rules and the Commodity Exchange Act prohibit event contracts tied to gaming or illegal activity. Three Louisiana-licensed operators, DraftKings, FanDuel, and Fanatics, have either begun offering sports event contracts in some jurisdictions or announced plans to do so.
Judge pauses Connecticut action against Kalshi
Louisiana's warning comes as federal courts begin weighing similar jurisdictional questions in other states, notably in Connecticut.
A federal judge has temporarily blocked Connecticut regulators from advancing an enforcement action against Kalshi, giving the company short-term protection while broader litigation unfolds.
Earlier this month, the state's Department of Consumer Protection sent notices to Kalshi, Robinhood, and Crypto.com alleging they enabled unlicensed online gambling by offering sports-related contracts that the agency argued qualified as sports betting.
Kalshi responded by filing suit in federal court, asserting that all markets listed on its platform fall under the authority of the CFTC. The company maintains that because its contracts are treated as federally regulated derivatives, Connecticut lacks independent regulatory power over them.
US District Judge Vernon Oliver ordered the state to pause enforcement of its cease-and-desist directive while the court considers whether federal commodities law preempts Connecticut's gambling statutes. The judge instructed the state to submit its response by Jan. 9, 2026, with Kalshi's reply due on Jan. 30.
A hearing scheduled for Feb. 12 is expected to offer an early indication of how the court views the balance between federal oversight and state authority.
Other states are following suit, including Massachusetts, which is currently seeking an injunction to block Kalshi’s sports prediction markets in the state.
