The Trump administration sued Minnesota on Tuesday over its new prediction market ban, contending it’s preempted by federal law.
Minnesota Gov. Tim Walz (D) signed the bill earlier this week, making it a felony to operate or advertise a prediction market in the state. It’s set to take effect Aug. 1.
“Minnesota’s attempt to criminalize derivatives contracts is precisely what Congress sought to prevent,” the Justice Department (DOJ) wrote in the lawsuit.
The Trump administration argues that prediction markets are in the federal domain and should be regulated by the Commodities Futures Trading Commission (CFTC). Kalshi and other major platforms have agreed.
But increasingly, states have used their laws and regulations to try to limit prediction markets’ reach, as trading volume soars to billions of dollars per month.
