DOJ and CFTC Sue Arkansas Over Kalshi Enforcement

The U.S. Department of Justice and Commodity Futures Trading Commission sued Arkansas on November 12, seeking to stop the state from enforcing gambling laws against prediction-market operator Kalshi and similar federally regulated platforms. The federal agencies argue that federal commodities law gives the CFTC authority over Kalshi’s event contracts and preempts state enforcement. Arkansas disputes that position, and the court has not resolved the issue.

The lawsuit names Arkansas and Attorney General Tim Griffin as defendants and asks for preliminary and permanent injunctive relief. The agencies say contracts tied to events qualify as swaps under the Commodity Exchange Act, which they argue places them within the CFTC’s exclusive jurisdiction when traded on federally regulated platforms. They contend that state enforcement would intrude on that federal framework.

The federal case follows Griffin’s November 4 lawsuit against Kalshi in Arkansas state court. His office alleges that the company operated an unlicensed gambling platform, allowing users to wager money on outcomes including sports, elections and entertainment. Arkansas also alleges violations of the state’s Deceptive...