Overview
- Minnesota Governor Tim Walz signed SF4760 on May 18, making it a felony to create, operate, assist, or advertise prediction‑market platforms and banning wagers on many event types.
- Hours later on May 19 the Commodity Futures Trading Commission, with filings reported to involve the Justice Department, sued Minnesota and asked for a preliminary injunction to stop the law before its Aug. 1 start date.
- The CFTC argues the law would criminalize CFTC‑regulated event contracts used for legitimate risk management, saying the measure could prevent farmers from buying weather and crop hedges.
- Supporters of the ban pointed to insider‑trading and integrity problems on platforms like Kalshi and Polymarket, including a charged service member who allegedly profited from classified information.
- The suit follows a pattern of CFTC lawsuits against other states and sets up likely years of litigation over whether federal derivatives law preempts state gambling rules, with the case possibly moving up to appellate courts.