Kalshi Sues Minnesota Over New Prediction Markets Law

Kalshi has filed a federal lawsuit against Minnesota after the state approved a law that would criminalize operating, hosting or promoting prediction market platforms beginning Aug. 1. The legal challenge marks another major battle over how prediction markets should be regulated in the United States.

Minnesota Prediction Markets Law Faces Legal Challenge

The dispute began after Minnesota Governor Tim Walz signed legislation that makes it illegal to advertise or run prediction market services across the state. In response, Kalshi argued in federal court that the law conflicts with existing federal regulations governing derivatives markets.

The company claims the measure violates the U.S. Constitution’s Supremacy Clause, arguing that the Commodity Exchange Act gives the CFTC exclusive authority over federally regulated prediction markets.

Kalshi and CFTC Push Back Against State Restrictions

Kalshi also challenged provisions restricting marketing and advertising, saying they may violate First Amendment protections. The lawsuit follows a similar legal move by the CFTC earlier this month.

The case comes as prediction markets face increasing scrutiny worldwide, with several countries tightening restrictions on such platforms.