CFTC Sues Arkansas to Block State Crackdown on Kalshi's Event Contracts

The Commodity Futures Trading Commission said on November 13 that it has sued the state of Arkansas to stop the state from halting event-contract trading and from imposing civil penalties the agency pegged at "up to hundreds of millions of dollars" on CFTC-registered exchanges.

The target of Arkansas's underlying action is Kalshi, which the CFTC describes as a CFTC-designated contract market — a federally registered exchange. According to the CFTC, Arkansas is pursuing a civil enforcement case against Kalshi in state court. The CFTC's argument is a preemption claim: that Arkansas's attempt to obstruct exchanges "operating lawfully under the Commodity Exchange Act" is overridden by federal law, and that the agency holds "sole jurisdiction" over these markets under the authority Congress gave it.

"Arkansas seeks to shut down event contracts ranging from sports and politics to other important world events," CFTC Chairman Michael S. Selig said in the announcement, adding that the Commission "will not let state interference thwart its regulatory efforts and destroy federally regulated markets."

The agency framed the suit as part of a wider campaign. It said Arkansas is the 11th state the CFTC has sued over the issue, and that it has also filed amicus briefs in four federal Courts of Appeal and one state Supreme Court.

Key facts

• The CFTC filed suit against Arkansas on November 13, 2026, to block the state's action. (CFTC Release 9325-26)
• The state action targets Kalshi, a CFTC-designated contract market, in state court. (CFTC)
• The CFTC says Arkansas's penalties could reach "up to hundreds of millions of dollars" against CFTC-registered exchanges. (CFTC)
• Arkansas is the 11th state the CFTC has sued over event contracts; the agency has also filed amicus briefs in four federal appeals courts and one state Supreme Court. (CFTC)
• The CFTC asserts "sole jurisdiction" over these markets under the Commodity Exchange Act. (Chairman Michael S. Selig, CFTC)

The real-world read

This account comes entirely from the CFTC, a party to the litigation, and it reads like it: the chairman calls prediction markets useful for "risk management" and public information, which is advocacy, not a neutral finding. Arkansas's side — what conduct the state alleges, and why it thinks a federally registered exchange falls under state law — isn't laid out here, and Kalshi has not been quoted. The "hundreds of millions" penalty figure is the CFTC's characterization of exposure, not a confirmed state demand. Preemption is a contested legal theory, not a settled fact; the agency's own tally — 11 state suits plus five amicus filings — signals how unresolved this is across courts, not that it has prevailed. Worth watching: whether "sole jurisdiction" survives, given that sports-related event contracts are exactly what many states' gambling regulators claim as their turf.

Opinion, and whose

Chairman Selig's view: prediction markets "prove their value," and state interference would "destroy federally regulated markets." That is the CFTC's position as a litigant, not an adjudicated outcome. No opposing or independent assessment was available in the announcement.

Sources

• CFTC Press Release 9325-26 (November 13, 2026) — primary source; announced the lawsuit, the Kalshi connection, penalty characterization, the 11-state count, and Chairman Selig's quotes. This is the agency's own statement as a party to the case, so its framing favors the CFTC.

This is news coverage, not financial or legal advice.