This action increases pressure while prediction markets, including Kalshi and Polymarket, grow and encounter multiple state lawsuits and tribal opposition. Louisiana gaming regulators became the newest state authority commenting on prediction markets through their recent advisory declaring sports event contracts equal sports betting under state legislation. Christopher Hebert, Louisiana Gaming Control Board chair, distributed the letter last week to licensees “exploring opportunities to operate, offer or otherwise facilitate access to prediction markets, platforms or event-based contracts”.

“The board believes these activities represent sports wagering under Louisiana law and lack compliance with Louisiana Gaming Control law or a valid Louisiana-issued licence or permit,” states the letter that iGB obtained. “This advisory clarifies that direct or indirect involvement in sporting event contracts operation, offering, or facilitation might impact a regulated party’s suitability for licensure or permitting in Louisiana.” Louisiana joins multiple states attempting to regulate prediction markets through existing gambling laws by classifying sports event contracts as illegal sports betting and threatening licenses.

The LGCB letter came after several states warned sports betting operators about launching prediction market products. Fanatics Markets began operations last week. DraftKings and FanDuel will prepare their launches soon. Daily fantasy sports operators PrizePicks and Underdog started prediction markets, too. Governor Jeff Landry strengthened the LGCB’s enforcement authority this year by vetoing a sweepstakes casino ban bill, claiming it lacked necessity. The LGCB subsequently issued 40 cease-and-desist letters targeting illegal gambling operators.

Louisiana Issues a Prediction Markets Warning

The LGCB letter stated “sports and other event contracts require a Louisiana sports wagering gaming licence”, while acknowledging sports betting operators partner with other companies for product offerings. “Louisiana prohibits any person or entity from offering, accepting, facilitating or enabling sports wagering unless conducted by licensed or permitted operators through approved sports wagering platforms exclusively on board-approved Sports Wagering Catalogue events,” the letter explains. “Event-style ‘contracts’, ‘swaps’, ‘markets’ or other ‘financial instruments’ allowing value stakes on sporting event outcomes outside board-licensed or permitted sports wagering operators constitute illegal gambling.”

LGCB rejects viewing sports event contracts as commodity transactions under the federal Commodity Futures Trading Commission regulation. Operators like Kalshi claim CFTC regulation permits nationwide operation. Kalshi battles numerous lawsuits against state regulators throughout the US. “Louisiana law makes such activity illegal, plus the Commodities Exchange Act and CFTC regulations ban event contracts involving gaming and state-illegal activities,” the letter states. “The board considers these contracts both gaming and illegal, eliminating any defence for offering such activity through a CFTC licence.” Louisiana Gaming Control Law violations could impact licensing, according to the warning. Gambling law violations in other states might affect regulatory suitability, too.

Prediction Markets Lawsuits Feature Kalshi Prominently

US regulators nationwide focus on prediction markets as sportsbook operators develop product offerings. Over 20 prediction markets lawsuits remain active across America, with many featuring Kalshi versus state regulators. Tribal arguments claim that prediction markets breach the Indian Gaming Regulatory Act. Connecticut joined the prediction markets lawsuit list last week alongside Maryland, Nevada, New Jersey, New York and Ohio.

Massachusetts schedules a court hearing this week. Attorney General Andrea Campbell sued Kalshi earlier this year. Nevada’s judge reversed his previous ruling last month that granted Kalshi a preliminary injunction against state regulatory action. Legal debates continue while operators, including Kalshi and Polymarket, expand mainstream presence. Kalshi revealed $1 billion in funding last week, reaching a $11 billion valuation.