The DOJ and CFTC challenge Minnesota’s first-in-nation prohibition, escalating a federal-state regulatory battle over event contracts.
Minnesota enacted the first state-level ban on prediction markets, criminalizing their operation or promotion. The law took effect immediately, drawing swift legal action from the Trump administration’s DOJ and CFTC, which argue the prohibition oversteps federal authority over event contracts.
States including Minnesota have targeted platforms like Kalshi and Polymarket, alleging their wagers violate gambling laws. The platforms counter that CFTC jurisdiction preempts state regulation, a position the Trump administration has aggressively defended in court this year.
The lawsuit marks the latest clash in a broader jurisdictional dispute, with multiple states suing prediction market operators and the federal government countersuing. The outcome may hinge on judicial interpretation of CFTC oversight.