The Commodity Futures and Trading Commission and the U.S. Department of Justice sued Minnesota, Governor Tim Walz, and a handful of other state officials on Tuesday over a newly signed omnibus bill that bans prediction markets in the state.
The lawsuit, filed less than 24 hours after Walz signed SF 4760 into law, argues that Minnesota is unlawfully attempting to regulate federally overseen derivatives markets that fall under the CFTC's "exclusive jurisdiction."
The complaint describes Minnesota's legislation as "the first outright ban on prediction markets in the U.S."
Under the new law, Minnesota prohibits prediction markets, which allow customers to wager on the outcome of everything from sporting events to weather, and company valuations to goings on in the government. The law is set to take effect on Aug. 1.
The CFTC and DOJ claim that these are federally regulated products and "swaps" that trade on CFTC-approved exchanges, and therefore are outside the authority of states to criminalize or prohibit them.
