The federal government has sued Minnesota over a new law that would make it a felony to operate, host, or advertise prediction markets in the state, opening a major legal fight over platforms such as Polymarket and Kalshi at a time when regulators are already wrestling with questions about gambling, insider information, and national security.
The Commodity Futures Trading Commission filed the lawsuit, seeking to block the law before it takes effect Aug. 1. Minnesota Gov. Tim Walz signed the measure Monday as part of a public safety bill, making Minnesota the first state to enact an outright ban on prediction markets, according to ABC News. The law passed with bipartisan support, 57-9 in the state Senate and 100-32 in the House, and targets companies rather than individual users.
