DOJ and CFTC Sue Arkansas to Block Action Against Kalshi

The US Department of Justice and the Commodity Futures Trading Commission (CFTC) have filed a federal lawsuit against Arkansas Attorney General Tim Griffin, The Block and TokenPost reported on Nov. 13. The agencies want to stop the state's enforcement action against prediction market Kalshi.

Details

According to The Block, the complaint was filed in the US District Court for the Eastern District of Arkansas. The agencies cite the Commodity Exchange Act, arguing the CFTC has "exclusive jurisdiction" over futures and swaps on regulated platforms such as Kalshi, so state law is preempted. They say Arkansas's efforts "intrude on the exclusive federal scheme" of commodity regulation.

They ask for preliminary and permanent injunctions barring the state from pursuing its case against Kalshi and from bringing future actions against CFTC-regulated prediction markets. Arkansas sued Kalshi on Nov. 4, calling it an illegal gambling platform. We could not find the complaint itself or a DOJ or CFTC press release at the time of writing, so details come from the two outlets.

What This Means for the Market

The suit is another federal move against states in the fight over who regulates prediction markets. The CFTC earlier sued Utah in a similar case. The outcome will decide whether states can treat such contracts as gambling. It matters for crypto because crypto platforms also run prediction markets, and we show Polymarket data in the Market Pulse block of the daily brief.