Minnesota Bans Prediction Markets, Wins CFTC Suit as a Prize
Posted on: May 20, 2026, 10:15h.
Last updated on: May 20, 2026, 10:15h.
- Minnesota is the first state to ban prediction markets
- The CFTC swiftly sued the state
- Commission says Walz “puts farmers last”
On Monday, Gov. Tim Walz (D-MN) signed a bill banning prediction markets, making Minnesota the first state to do so while drawing quick rebuke from the Commodities Futures Trading Commission (CFTC).
Included in SF 4760, an omnibus public safety bill, are clauses making it a felony to operate or assist in the operation of a prediction market in Minnesota. The CFTC, which is the federal regulator overseeing prediction markets, says the ban runs counter to Minnesota’s status as a major agriculture state and disadvantages the state’s farmers, many of whom have long relied on contracts regulated by the commission.
This Minnesota law turns lawful operators and participants in prediction markets into felons overnight,” said CFTC Chairman Michael Selig in a statement. “Minnesota farmers have relied on critical hedging products on weather and crop-related events for decades to mitigate their risks. Governor Walz chose to put special interests first and American farmers and innovators last.”
Agriculture producers have long used commodities futures contracts, derivatives regulated by the CFTC, for hedging and risk management purposes.
In Minnesota, CFTC Sees Arizona Parallels
While Minnesota is the first state to ban prediction markets, it’s not the first to go down the road of tying yes/no exchanges.
In March, Arizona Attorney General Kris Mayes (D) filed a 20-count criminal complaint — including some felonies — against Kalshi, the largest US prediction market operator, asserting the company violates state laws by offering sports event contracts and derivatives tied to election outcomes.
The CFTC quickly sued Arizona and a federal judge recently granted Kalshi a preliminary injunction, barring Arizona from pursuing criminal charges against the company.
“In a lawsuit filed by the CFTC, a federal court in Arizona recently issued a preliminary injunction blocking Arizona from using its gambling laws to criminally prosecute prediction market operators,” according to the CFTC. “The Commission has also filed lawsuits against Connecticut, Illinois, and New York, and has filed amicus briefs in the U.S. Court of Appeals for the Sixth and Ninth Circuits and the Supreme Judicial Court of Massachusetts.”
Plenty of Political Implications
Walz, the 2024 Democrat nominee for vice president, banning prediction markets in Minnesota may introduce political scrutiny, particularly at a time when the state is under fire for widespread fraud allegations. On Sunday, the Minnesota Star Tribune published an article in which sources said it was “an open secret” that state officials failed to act on signs of fraud in the state. The paper’s CEO and publisher is Steve Grove, who served as the Commissioner of the Minnesota Department of Employment and Economic Development (DEED) under Walz.
Due in part to Donald Trump Jr. being an advisor to both Kalshi and Polymarket, the prediction market industry is often seen as right-leaning, but lobbyists recently hired by Kalshi have extensive ties to Democrat politicians and the recently established Coalition for Prediction Markets (CPM), though bipartisan, is led by Sean Patrick Maloney, a New York Democrat who served in Congress for a decade.
The CFTC’s case against Minnesota landed on the desk of US District Judge Laura Provinzino who was appointed to that role by former President Joe Biden.
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