CFTC Suing Minnesota Over Prediction Market Ban
Jesse M. Cox Published 27/05/2026
The Commodities Futures Trading Commission (CFTC) is suing the state of Minnesota over its plan to implement a ban on prediction market sites. The prohibition, which will eliminate most event contracts offered by prediction markets in Minnesota, is set to take effect on August 1.
The CFTC is seeking a preliminary injunction to prevent the new Minnesota law from taking effect. Minnesota is the first U.S. state to pass a law banning prediction markets from operating within its boundaries. Governor Tim Walz signed the bill into law last week. The CFTC is the federal regulator of prediction markets in the USA.
Minnesota is the latest state seeking to curb prediction markets
States are increasingly seeking to flex their muscles, attempting to control the rapid spread of prediction markets. There is an ongoing debate over the sports-event contracts these sites offer. States - especially with state-regulated sports betting in place - are calling the sports-event contracts nothing more than sports bets in cognito.
The prediction markets and the CFTC counter that argument. They point out that prediction markets are federally regulated and thus not controlled by state regulators.
Minnesota is seeking to ban almost all prediction market event contracts. It would still permit the trading of traditional commodities, such as securities.
“I’m very concerned about the harms of prediction markets on Minnesotans,” Minnesota Attorney General Keith Ellison said in a statement.
What makes the new Minnesota law unique is the potential for violators to face criminal charges. Users of prediction market sites wouldn't face charges. However, operators, advertisers, and organizations that provide supportive services, including data, could be criminally liable.
The CFTC is getting more aggressive in its defense of prediction markets
More than merely a regulator, the CFTC is trying to serve as judge, jury, and executioner in its aggressively protective stance in defending prediction markets. The regulator has now filed suits defending prediction markets in Minnesota, Arizona, Connecticut, Illinois, New York, and Wisconsin. The CFTC claims to hold exclusive jurisdiction over prediction markets.
“If Minnesota’s law is permitted to go into effect, the exchanges that offer these longstanding contracts—as well as those who partner with them—can be prosecuted as felons,” the CFTC lawsuit reads. “This flagrant and unprecedented incursion into the Commission’s exclusive regulatory sphere must be preliminarily and permanently enjoined.”
Since he assumed the role of Chair of the CFTC, Michael Selig made a vow to challenge any state effort to regulate prediction markets.
Given the assignment of the lawsuit is U.S. District Judge Laura Provinzino. An appointee of President Biden, she serves in St. Paul, Minn.
"My office and I are reviewing this lawsuit and will respond in court,” Ellison said.
President Trump Has Entered the Chat
U.S. President Donald Trump took to his favorite bully pulpit, his social media channel Truth Social, to blast Walz and other state officials who are leading the fight against prediction markets.
“Under my leadership, we are setting ‘rules of the road’ that are the Gold Standard for the States,” Trump posted on Truth Social. “We cannot have SCUM like Chris Christie, Letitia James, Tim Walz, and JB Pritzker setting the rules!”
“Other Countries are after this new form of Financial Market, and we want to remain at the top.”
Selig is a Trump Administration appointee. Trump's son, Donald Trump Jr., serves as an advisor to Kalshi and Polymarket. They are the top prediction market sites in the U.S. market.