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The Commodity Futures Trading Commission filed a lawsuit against Minnesota to block a new state law that would make operating or assisting in the operation of a prediction market a criminal felony. Through the lawsuit, the agency wants a federal court to halt enforcement of the law before its Aug. 1, 2026 effective date.
CFTC Chairman Michael Selig said in a statement that the law "turns lawful operators and participants in prediction markets into felons overnight." Selig also took aim at the governor directly, saying "Governor Walz chose to put special interests first and American farmers and innovators last," and noting that farmers across the state have long depended on hedging instruments tied to weather and crop events.
Among all state-level efforts to curtail prediction markets, the CFTC characterized Minnesota's law as the most sweeping, saying no other state measure it has challenged goes as far — including its explicit criminalization of weather-related event contracts. The agency noted that Minnesota is one of the largest agricultural producers in the U.S.
The CFTC argued in the lawsuit that Minnesota's law violates the U.S. Constitution by criminalizing at the state level the operation of derivatives markets governed by federal law, according to Reuters.
