The CFTC’s complaint against Minnesota, filed May 19, lands before Kalshi’s own suit, and both are making the same core argument: state gambling law can’t override the Commodity Exchange Act.
Minnesota’s law, signed by Gov. Tim Walz, makes operating or promoting a prediction market a criminal felony starting Aug. 1. It’s the first state ban of its kind in the country. Kalshi, a CFTC-designated contract market, filed its own federal suit arguing two violations: CFTC exclusive jurisdiction over designated contract markets, and First Amendment protection of advertising. CFTC Chairman Michael Selig put the stakes plainly: the law “turns lawful operators and participants in prediction markets into felons overnight.”
Minnesota AG Keith Ellison isn’t backing down. His office is reviewing Kalshi’s suit and will respond in court. Ellison has said prediction markets “prey especially on young people and low-income folks.” State Rep. Emma Greenman, who sponsored the bill, framed it as the state’s right to govern gambling on its own terms.
Minnesota isn’t just fighting Kalshi. The CFTC has separately sued New York, Connecticut, Illinois, and a coalition of other states in the same push to assert Commodity Exchange Act preemption. The CFTC’s Minnesota complaint puts preemption at the center, not Kalshi’s First Amendment advertising theory. If preemption holds, no state can write its way around CFTC-regulated event contracts. Minnesota signed up to be the test case.
Kalshi launched Americans for Fair Markets on May 22, a lobbying arm to shape federal prediction market policy. The injunction hearing comes first.
Rebecca Lauren