Federal lawsuit challenges Minnesota prediction market ban
The U.S. Commodity Futures Trading Commission filed a federal lawsuit against Minnesota, challenging a state law that bans prediction markets like Polymarket and Kalshi as preempted by federal law.[1]
The suit, filed by the CFTC under the Trump administration, argues only the federal government can regulate derivatives and futures markets.[1] CFTC Chair Michael S. Selig said the Minnesota law could criminalize lawful prediction market activity and cut off weather- and crop-related contracts that farmers use to hedge risk.[1]
Governor Tim Walz signed the statewide ban, which takes effect August 1. The law targets commercial prediction platforms that allow bets on political and other events, including private markets like Polymarket and Kalshi. The CFTC says federal oversight is necessary to protect national markets and to preserve hedging tools farmers rely on.
The new federal lawsuit sets up a likely court fight over whether states can regulate these platforms or whether that power rests solely with Washington.
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📌 Key Facts
- Gov. Tim Walz signed a statewide ban on prediction markets like Polymarket and Kalshi, with the law taking effect August 1.
- The U.S. Commodity Futures Trading Commission, under the Trump administration, filed a lawsuit arguing only the federal government can regulate derivatives and futures markets.
- CFTC Chair Michael S. Selig says the law could criminalize lawful prediction market activity and cut off weather‑ and crop‑related event contracts that Minnesota farmers use to hedge risk.
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