DOJ and CFTC Sue Arkansas to Block Kalshi Enforcement

The U.S. Department of Justice and Commodity Futures Trading Commission have sued Arkansas and Attorney General Tim Griffin in federal court, seeking to stop the state’s enforcement action against Kalshi. Arkansas sued Kalshi on November 4, alleging its event contracts constitute illegal gambling under state law. The filing challenges Arkansas’s attempt to apply state gambling law to Kalshi’s federally regulated contracts.

The complaint says the Commodity Exchange Act gives the CFTC exclusive jurisdiction over exchange-traded futures, options and swaps, and argues that Kalshi’s event contracts fall within that framework. The government is seeking declaratory and injunctive relief to prevent Arkansas from enforcing conflicting state restrictions against CFTC-regulated markets. The lawsuit escalates the jurisdictional battle surrounding prediction markets without resolving Arkansas’s underlying allegations against Kalshi. Kalshi is not a plaintiff in the federal case.

The case is pending in the U.S. District Court for the Eastern District of Arkansas. No ruling has yet granted the requested relief, meaning the Arkansas enforcement action has not been permanently blocked by the filing alone. The next milestone is the court’s consideration of whether federal commodities law preempts Arkansas’s claims and whether an injunction should issue. Any relief will depend on subsequent court orders.

Source: U.S. District Court for the Eastern District of Arkansas.

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