Kalshi and CFTC Sue Minnesota Over Prediction Market Ban Taking Effect August 1

According to Kalshi's official filing, the prediction market platform launched a federal lawsuit against Minnesota on May 29, in tandem with a separate CFTC challenge filed on May 19, seeking to block a state law scheduled to take effect on August 1. The Minnesota law, signed by Governor Tim Walz on May 18, would make it a criminal offense to operate, host, or promote prediction market platforms within the state.

Kalshi argues the measure violates the Commodity Exchange Act, which grants the CFTC exclusive jurisdiction over designated contract markets and derivatives. The company also contends Minnesota's advertising restrictions violate First Amendment protections by criminalizing speech related to federally regulated financial products. The lawsuit represents the most significant state-level legal challenge to prediction markets in the United States.