The gaming authority in Louisiana has issued a statement indicating that sports prediction markets are considered illegal sports betting according to state regulations, increasing scrutiny on companies such as Kalshi and Polymarket as legal challenges spread across the U.S.
In a notice distributed to license holders last week, Christopher Hebert, chair of the Louisiana Gaming Control Board (LGCB), asserted that the sports contracts available on prediction platforms directly align with the state’s definition of sports betting.
“The board holds that these activities qualify as sports wagering in Louisiana law and are not being carried out in accordance with Louisiana Gaming Control regulations or under a valid state-issued license or permit,” the letter stated, as reported by iGB. It also warned that any involvement, direct or indirect, in such markets might impact a company’s eligibility for a state license.
Louisiana is joining an expanding group of states aiming to regulate prediction markets under established gambling laws, as significant players like Fanatics Markets, DraftKings, FanDuel, and daily fantasy sports companies PrizePicks and Underdog make their entry into this sector.
This advisory comes amidst intensified regulatory actions. Earlier this year, Governor Jeff Landry vetoed a bill targeting sweepstakes casinos, claiming it was unnecessary; subsequently, the LGCB issued 40 cease-and-desist orders to unlawful gambling operators.
The regulators indicated that only those entities with a sports wagering license are permitted to offer event contracts within the state. “No individual or entity may present, accept, assist, or facilitate sports wagering in Louisiana unless these activities are carried out by a licensed or permitted operator,” the board emphasized.
Any “event-style contract, swap, market, or financial instrument” that allows users to wager on sports results without a valid license “is deemed illegal gambling,” they added.
Moreover, the LGCB dismissed claims that sports event markets adhere to federal commodities regulations monitored by the Commodity Futures Trading Commission (CFTC). “Such activity is not only illegal under Louisiana law; the Commodities Exchange Act and the CFTC’s regulations ban event contracts related to gaming that violate state law,” the advisory stated. “With the board asserting that these contracts are both gaming and illegal, it sees no justification for offering such operations under a CFTC license.”
Officials cautioned that breaches in Louisiana, or in other jurisdictions, may jeopardize a company’s licensing status.
This development occurs as prediction markets face over 20 lawsuits nationwide, with many involving Kalshi in conflicts with state authorities. Connecticut recently became the latest state to experience a lawsuit, joining Maryland, Nevada, New Jersey, New York, and Ohio.
A court in Massachusetts is set to hear a case this week initiated by Attorney General Andrea Campbell, while a Nevada judge last month overturned a prior decision that had temporarily protected Kalshi from regulatory challenges.
Tribal organizations have also contended that prediction markets contravene the Indian Gaming Regulatory Act.
Despite the escalating scrutiny, the industry is still advancing. Kalshi disclosed a $1 billion funding round last week, boosting its valuation to $11 billion.