DOJ and CFTC sue Arkansas over Kalshi enforcement case

Filed in the U.S. District Court for the Eastern District of Arkansas, the complaint names the state and Attorney General Tim Griffin as defendants. Federal officials argue that the Commodity Exchange Act gives the CFTC exclusive authority over derivatives traded on designated contract markets, including the event contracts Arkansas is challenging. They seek preliminary and permanent injunctions covering state investigations and enforcement against registered markets, their affiliates and business partners. Kalshi is not a defendant in the federal case, and the judge has not ruled on the request.

Griffin filed the state lawsuit against KalshiEX LLC and Kalshi Inc. on November 4 in Independence County Circuit Court. It alleges that the companies offered unlicensed gambling on sports, elections and entertainment while presenting the products as lawful financial trading. Griffin said, “Arkansas law is concerned with substance, not semantics.” The 57-page complaint includes three claims under the Arkansas Deceptive Trade Practices Act and an unjust-enrichment claim. The state seeks an injunction, customer repayment, restitution, unpaid taxes and civil penalties of up to $10,000 per violation, according to the complaint. These are requested remedies, not a judgment against Kalshi.

Gaming lawyer Daniel Wallach described Arkansas as the 11th state sued by the CFTC over prediction-market oversight, after Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, Utah and Wisconsin. Polymarket US and OG.com, a prediction-market business associated with Crypto.com, separately sued Griffin and state gaming officials on November 9, seeking to stop restrictions on their event contracts.

The federal case follows the government’s October lawsuit against Utah. Other disputes remain active: New Jersey is seeking Supreme Court review of a federal appeals decision favoring Kalshi, while a California federal judge’s November 4 preliminary injunction restricted Kalshi sports contracts on the lands of Blue Lake Rancheria and Chicken Ranch Rancheria. The order applies to specified tribal lands, not statewide.

Louisiana Attorney General Liz Murrill sued Kalshi, Polymarket and other operators on November 12. State Judge Jeffrey Johnson issued a temporary restraining order that day covering event contracts offered to Louisiana residents without a gaming license. The order lasts ten days unless extended; a hearing on preliminary relief is scheduled for November 30.