TheBlock
The CFTC and the U.S. Department of Justice sued Minnesota, Governor Tim Walz, and several state officials on Tuesday over SF 4760, an omnibus bill Walz signed less than 24 hours earlier that the complaint calls "the first outright ban on prediction markets in the U.S." The law, set to take effect Aug. 1, prohibits platforms that let users wager on the outcome of sporting events, weather, company valuations, and political outcomes, and extends criminal liability to banks, payment processors, media organizations, and sports leagues that advertise, verify, or supply data tied to those markets. The CFTC and DOJ argue these products are federally regulated "swaps" traded on CFTC-approved exchanges and therefore outside any state's authority to criminalize, calling Minnesota's move "a flagrant and unprecedented incursion into the Commission's exclusive regulatory sphere."
Why it matters
This is the sharpest escalation yet in the federal-vs-state fight over event contracts. The CFTC has already sued Illinois, Arizona, and Connecticut for trying to shut down Kalshi and Polymarket under state gambling rules, but Minnesota is the first state to write a flat prohibition into statute, and the first to be sued over an explicit ban rather than a regulator's enforcement action. The lawsuit also widens the blast radius beyond the platforms themselves: by criminalizing advertising, data feeds, and payment rails, Minnesota effectively pulled MLB, the NHL, Fox, Dow Jones, and the Wall Street Journal — all of which have struck partnerships with prediction market venues — into the line of fire.
Market impact
The complaint is the most aggressive signal yet of how CFTC Chairman Mike Selig intends to defend federal turf. Selig's agency has spent 2026 hardening its position, publishing a formal advisory on event contracts in March and opening a public rulemaking campaign. The Minnesota case will now set the precedent for every other state weighing similar action, and a CFTC win would make prediction markets functionally immune to state-level prohibition, locking in the business models Kalshi and Polymarket have been building.
Frequently asked questions
-
Why is the CFTC suing Minnesota over prediction markets?
The CFTC and DOJ argue SF 4760 unlawfully regulates federally overseen "swaps" traded on CFTC-approved exchanges, and that no state has authority to criminalize them. The complaint calls Minnesota's ban "a flagrant and unprecedented incursion" into the Commission's exclusive jurisdiction and seeks a preliminary and…
-
When does Minnesota's prediction market ban take effect?
The law is set to take effect on Aug. 1, though the CFTC's lawsuit — filed less than 24 hours after Governor Tim Walz signed the bill — seeks to block it before then.
-
What does the Minnesota law actually prohibit?
SF 4760 bans platforms that let users wager on outcomes ranging from sporting events and weather to company valuations and political events. It also extends criminal liability to banks, payment processors, media organizations, and sports leagues that advertise, verify, or supply data tied to those markets.
-
Which media and sports companies are caught up in the lawsuit?
The complaint specifically calls out partnerships between prediction market venues and Major League Baseball, the NHL, Fox, Dow Jones, and the Wall Street Journal — all of which could face exposure under Minnesota's expanded liability framework.
-
Has the CFTC sued other states over prediction markets?
Yes. Illinois, Arizona, and Connecticut have already been sued by the CFTC for trying to shut down Kalshi and Polymarket under state gambling rules, but Minnesota is the first state to face a lawsuit over an explicit statutory ban rather than a regulator's enforcement action.
Crypto News
CoinDesk
WatcherGuru
WuBlockchain
CoinTelegraph
CryptoSlate