Louisiana says sports prediction markets amount to illegal betting under state law

Louisiana’s gaming regulator has warned that sports prediction markets constitute illegal sports wagering under state law, escalating pressure on platforms such as Kalshi and Polymarket as lawsuits mount across the United States.

In an advisory sent to licensees last week, Louisiana Gaming Control Board (LGCB) chair Christopher Hebert said sports event contracts offered by prediction platforms fall squarely within the state’s definition of sports betting.

“It is the board’s position that such activities constitute sports wagering under Louisiana law and are not being conducted in compliance with Louisiana Gaming Control law or under a valid Louisiana issued licence or permit,” the letter said as reported by iGB. It added that any direct or indirect involvement in such markets could affect a company’s suitability for a state licence.

Louisiana joins a growing bloc of states working to place prediction markets under traditional gambling law as major operators including Fanatics Markets, DraftKings, FanDuel, and daily fantasy firms PrizePicks and Underdog enter the space.

The warning comes amid heightened enforcement activity. Earlier this year, Governor Jeff Landry vetoed a bill targeting sweepstakes casinos, arguing it was unnecessary; the LGCB later issued 40 cease-and-desist letters to illegal gambling operators.

The regulator stressed that only entities holding a sports wagering licence may offer event-based contracts in the state.“No person or entity may offer, accept, facilitate or in any way enable sports wagering in Louisiana unless the activity is conducted by a licensed or permitted operator,” the board wrote.

Any “event-style ‘contract’, ‘swap’, ‘market’ or other ‘financial instrument’” allowing users to stake value on sports outcomes without a licence “constitutes illegal gambling,” it added.

The LGCB also rejected arguments that sports event markets fall under federal commodities law overseen by the Commodity Futures Trading Commission (CFTC). “Not only is such activity illegal under Louisiana law, but the Commodities Exchange Act and the CFTC’s regulations prohibit event contracts related to gaming and activities which are illegal under state law,” the advisory said. “As it is the board’s position that these contracts are both gaming and illegal, the board sees no defence to offering such activity pursuant to a CFTC licence.”

Regulators warned that violations in Louisiana or in other states, could jeopardize a company’s licensing status.

The move comes as prediction markets face more than 20 lawsuits nationwide, many involving Kalshi in disputes with state regulators. Connecticut became the latest state to see a lawsuit filed, joining Maryland, Nevada, New Jersey, New York and Ohio.

A Massachusetts court will hold a hearing this week in a suit brought by Attorney General Andrea Campbell, while a Nevada judge last month reversed an earlier ruling that had temporarily shielded Kalshi from regulatory action.

Tribal groups have also argued that prediction markets violate the Indian Gaming Regulatory Act.

Despite the mounting scrutiny, the sector continues to grow. Kalshi last week announced a $1 billion funding round, lifting its valuation to $11 billion.