DOJ and CFTC sue Arkansas over Kalshi as Robinhood's $173 million event-contract line passes crypto

The federal government picked a side

The Justice Department and the Commodity Futures Trading Commission sued Arkansas Attorney General Tim Griffin on Thursday in the U.S. District Court for the Eastern District of Arkansas, asking a judge to stop the state from enforcing its gambling laws against Kalshi, the prediction market platform ¹. The suit argues that the Commodity Exchange Act gives the CFTC exclusive authority over the event contracts Kalshi lists, and it seeks preliminary and permanent injunctions ¹.

Arkansas opened the exchange: Griffin sued Kalshi on November 4 as an illegal gambling platform, and the state's Deceptive Trade Practices Act carries per-violation penalties that the federal complaint↗ estimates could reach the hundreds of millions of dollars ². Arkansas is now the 11th state the CFTC has sued, with Judge Brian S ³. Miller assigned and no ruling yet ³.

Washington defending prediction markets rather than studying them is new. "The CFTC will continue to defend its sole jurisdiction over these federally regulated markets as granted by Congress," Chairman Michael Selig said ³.

Louisiana blocked the contracts first and will hear arguments later

The same Thursday, Louisiana Attorney General Liz Murrill sued Kalshi, Polymarket, Robinhood▼−5.68% — Robinhood, down 5.68 percent today and Coinbase▼−3.34% — Coinbase, down 3.34 percent today, and a Tangipahoa Parish judge issued a restraining order↗ hours later requiring the companies to halt event contracts for Louisiana residents and to geofence the state ¹⁴. Robinhood halted contracts in Louisiana that day ⁴.

A hearing on a preliminary injunction is set for November 30 at 9 a.m. ⁵. Attorney Daniel Wallach, who follows these cases, counts state attorneys general that sue first in state court at 100% in winning preliminary relief, and credits Murrill's all-at-once filing with avoiding the whack-a-mole problem ⁴. The counterweight: the CFTC's camp has won preliminary injunctions on the federal side in Arizona, Illinois and Minnesota ³, and the federal preemption cases take a year or longer to decide ⁴.

The line at stake is Robinhood's fastest riser

Event-contract revenue reached $173 million in the September quarter, more than six times the year-earlier amount, and passed crypto transaction revenue, which fell 55% to $120 million ⁶. October brought 5.9 billion contracts, up 136% year over year, about 190 million a day, while crypto volume fell 48% from October 2025 to $17 billion ⁶. The chart below shows the handoff; options remain the largest category at $399 million ⁶. Kalshi is private, so Robinhood, the listed broker routing customers into these markets, is where the outcome prices ⁷.

Two dates now price the product

If preemption holds, the second-largest disclosed transaction category is shielded nationally and free to keep compounding. If state gambling definitions win, the category caps out wherever states win. Watch November 30 in Louisiana, and Judge Miller's docket in Little Rock ³⁵. The federal government has bought Kalshi a real defense; the states' unbroken record in their own courts says customers there may not feel it yet ⁴.