Kalshi challenges Minnesota law targeting prediction markets
The company has filed a lawsuit seeking to block the new state law that would prohibit prediction markets.
US.- Prediction market operator Kalshi filed a complaint against a new law in the state of Minnesota that bans prediction markets from August 1, 2026. The lawsuit follows a separate challenge brought by the Commodity Futures Trading Commission (CFTC) as industry pushes back against state-level restrictions on prediction market platforms offering sports event contracts.
SF 3432, which was signed into law by Governor Tim Walz last month, subjects the operation of prediction markets in Minnesota to criminal penalties. In its complaint, Kalshi argues that the law conflicts with the Supremacy Clause of the US Constitution because it attempts to regulate an area that falls under the exclusive authority of the CFTC.
The company maintains that the federal regulator has sole jurisdiction over contract markets and the contracts traded on such platforms. It also claims that the Minnesota law infringes upon rights protected under the First Amendment. The company is seeking an injunction that would prevent the state from enforcing the measure while the case is being litigated.
Minnesota defends its position
Minnesota Attorney General Keith Ellison indicated that the state intends to defend the legislation. In a statement released by his office, Ellison expressed concern about the impact of prediction markets on consumers: “I’m very concerned about the harms of prediction markets on Minnesotans. Prediction markets are designed to be addictive and prey especially on young people and low-income folks. They help the ultra-rich get richer, and the rest of us get poorer. My office and I are reviewing this lawsuit and will respond in court”.
Minnesota is not the only jurisdiction facing legal action from the CFTC over the issue. The federal regulator has also launched challenges in Illinois, New York, Connecticut and Arizona.
