Kalshi, a crypto prediction market platform, and the U.S. Commodity Futures Trading Commission have each filed lawsuits against Minnesota this week, aiming to block a state law that bans prediction markets. The legal actions mark a new front in the ongoing regulatory war over event-based betting platforms. Kalshi announced its suit via a post on X, while the CFTC's filing came separately.
What the Minnesota law does
The law in question prohibits prediction markets within the state — platforms where users bet on outcomes ranging from elections to sports results. Minnesota lawmakers passed the measure earlier this year, citing consumer protection concerns. Both Kalshi and the CFTC argue the state overstepped its authority by trying to regulate a market that falls under federal oversight.
Kalshi’s legal argument
In its lawsuit, Kalshi contends that the Minnesota law conflicts with the Commodity Exchange Act and infringes on the CFTC's exclusive jurisdiction over commodity derivatives. The platform's legal team posted the announcement on X, framing the suit as a defense of its right to operate. The company has previously argued that prediction markets provide valuable public information and should not be treated like gambling.
CFTC steps in
The CFTC's own lawsuit against Minnesota is unusual — the federal agency is typically the one being sued by platforms, not the one filing. Here, the CFTC is taking the rare step of challenging a state law directly, arguing it interferes with federal regulatory authority. The move signals that the agency views prediction markets as falling squarely within its domain, despite recent enforcement actions against similar platforms.
What happens next
Both lawsuits have been filed in Minnesota federal court. No hearings have been scheduled yet. The cases will likely test how far states can go in banning financial products that the CFTC already regulates. For Kalshi, the immediate goal is to keep serving Minnesota users while the legal fight plays out.
