- The Commodity Futures Trading Commission (CFTC) are suing Minnesota after they passed a prediction market ban bill.
- Minnesota Governor Tim Walz signed off on SF 4760 on Monday, resulting in a CFTC lawsuit Tuesday afternoon to block the new state law.
- The bill would prohibit prediction market companies from offering event contracts on sporting events, elections, pop culture, war, and many other markets in Minnesota.
MINNEAPOLIS – Minnesota Governor Tim Walz signed SF 4760 into law on Monday, which would ban prediction markets from offering specific event contracts on sports and other markets in the state. Now, the CFTC has responded with a lawsuit in an attempt to block the new state law that would make operating prediction markets in the state a criminal felony.
The lawmakers behind SF 4760 see that sports-related event contracts offered by Kalshi and other prediction market operators too closely resemble legal sports betting, which is reserved for tribes in Minnesota. Governor Walz sees it the same way, but the CFTC Chairman sees it as an attack on farmers in the state.
“This Minnesota law turns lawful operators and participants in prediction markets into felons overnight,” said CFTC Chairman Michael S. Selig in Tuesday’s press release. “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 Latest State On CFTC’s Naughty List
Tuesday’s lawsuit against Minnesota puts them on an expansive list of states that have attempted to criminally prosecute prediction market operators. The CFTC has also filed lawsuits against Arizona, Connecticut, New York, Illinois, and other states.
While these states have issued similar legislation to Minnesota’s prediction ban, Ohio and Iowa have anticipated failures in court by regulating these prediction entities. These states have approached prediction markets with tax plan, aiming to make them pay taxes like online sportsbooks do.
