The United States Commodity Futures Trading Commission has sued the state of Minnesota over its new law banning prediction market platforms. The CFTC argues the state’s prohibition on platforms like Kalshi and Polymarket illegally oversteps federal authority granted by the Commodity Exchange Act. The lawsuit, filed on May जून, 2026, seeks to block the law which criminalizes operating and advertising such markets statewide.
The U.S. Commodity Futures Trading Commission has filed a lawsuit challenging Minnesota’s new law banning prediction market platforms. The CFTC argues that only federal regulators have authority over event contracts under the Commodity Exchange Act.
Minnesota’s legislation, Senate File 4760, criminalizes operating, advertising, and supporting prediction market exchanges within the state. It considers event contracts related to sports, weather, and international affairs to be gambling bets.
The CFTC is seeking an injunction to halt the law both temporarily and permanently. It contends the state cannot interfere with federal regulation of swaps and that the ban conflicts with existing federal approvals for exchanges.
Officials named in the lawsuit include Governor Tim Walz, Attorney General Keith Ellison, and Public Safety Director Jon Anglin. The CFTC claims the state legislation would force approved exchanges to cease activities.
According to the CFTC Minnesota lawsuit, proceeding with the state ban would affect federal power and disrupt CFTC-regulated markets. The commission states it has already accepted self-certified contracts on these exchanges.
Platform Kalshi has also pushed back, stating the law is unenforceable and incompatible with federal law. Kalshi asserts that prediction markets are subject to national regulation, not state prohibition.
The lawsuit arises amid efforts by some states to regulate prediction markets as unlawful sports wagering. This initiative marks the first time such a comprehensive legal prohibition is being made.
The case is being spearheaded by CFTC Chairman Michael Selig. In a statement on social media, Selig said, “Governor Walz and Minnesota are putting special interests first and American farmers and innovators last.”
Apart from this disagreement, Minnesota has enacted other cryptocurrency regulations. The state recently permitted banks to provide crypto custody services while also enacting a crypto ATM ban to prevent scams.
