Justice Department and CFTC sue Arkansas to stop its gambling case against Kalshi, claiming exclusive federal power over regulated event contracts

The federal government has gone to court to stop Arkansas from pursuing Kalshi. The Justice Department and the Commodity Futures Trading Commission sued the state and its attorney general, Tim Griffin, on Thursday in the US District Court for the Eastern District of Arkansas, The Block and crypto.news reported.

The agencies argue that the Commodity Exchange Act gives the CFTC exclusive jurisdiction over futures, options and swaps traded on regulated exchanges, and that the event contracts Arkansas is targeting are swaps. They are asking for preliminary and permanent injunctions that would stop the state from enforcing its laws against CFTC-regulated prediction markets. Kalshi itself is not a party to the federal suit, and no judge has ruled.

Griffin sued Kalshi's operators on November 4 in Independence County Circuit Court. He alleges the platform takes wagers on sports and entertainment without a gambling license, accepts users as young as 18, and pays no gambling taxes. "Arkansas law is concerned with substance, not semantics," he said then.

Arkansas was already facing suits that Polymarket's US exchange and OG.com, a prediction-market business associated with Crypto.com, filed against Griffin and state gaming officials on November 9. The new suit adds the federal government's weight to that fight, on the same day Louisiana sued Kalshi, Polymarket and other platforms in its own courts.