The Trump administration on Tuesday filed a lawsuit against Minnesota, seeking to block its new ban on prediction markets. Gov. Tim Walz (D-MN) signed a controversial bill into law earlier this week that imposes criminal penalties for operating or advertising a prediction market in the state. The Commodities Futures Trading Commission sued to block its implementation, arguing that the state lacks the authority to ban most bets placed on prediction markets such as Kalshi and Polymarket. The federal government has jurisdiction over prediction markets through the CFTC, the lawsuit states, warning that the law would upend Minnesota’s agricultural industry due to its criminalization of weather-related event contracts. “This Minnesota law turns lawful operators and participants in prediction markets into felons overnight,” FTC Chairman Michael Selig said in a statement. “Minnesota farmers have relied on critical hedging products on weather and crop-related events for decades to mitigate their risks. Governor Walz chose to put special interests first, and American farmers and innovators last.”
Minnesota Attorney General Keith Ellison said his office would respond in court.
“Prediction markets are designed to be addictive and prey especially on young people and low-income folks,” he told Reuters. “They help the ultra-rich get richer, and the rest of us get poorer.”
