Kalshi, CFTC sue Minnesota over prediction market ban

Kalshi and the CFTC are suing Minnesota to block a new law banning prediction markets, arguing it violates federal authority. The case highlights a national debate over regulation.

Kalshi has filed a federal lawsuit against Minnesota to block a new law banning prediction markets, which is set to take effect on August 1. The law, signed by Governor Tim Walz, would make it a felony to operate or facilitate prediction market platforms in the state. Kalshi contends that the federal Commodity Exchange Act gives the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over event contracts. They argue that Minnesota’s law unlawfully overrides this authority, violating the Supremacy Clause of the U.S. Constitution. The CFTC has also filed a similar lawsuit, seeking to prevent the law’s enforcement. These legal actions are part of a broader national debate over whether prediction markets should be regulated at the state or federal level. While states cite gambling laws, platforms like Kalshi assert that federal oversight should prevail. The dispute has spread to other states, including Rhode Island, and may ultimately reach the U.S. Supreme Court.