Prediction Market Kalshi has filed a federal lawsuit against a Minnesota bill to criminalize operating, hosting or promoting such a platform in the state starting August 1.
The filing follows a petition filed by the Commodity Futures Trading Commission (CFTC) on May 19, the day after Governor Tim Walz signed the law, arguing that the legislation violated the U.S. Constitution by criminalizing at the state level the operation of prediction markets governed by federal regulators.
In his filing, Kalshi claimed the law violated the Constitution’s Supremacy Clause, which states that the federal Commodity Exchange Act (CEA) grants the CFTC “exclusive jurisdiction” over derivatives and swaps traded on designated contract markets (DCMs).
The platform also challenged a provision that criminalizes the marketing or advertising of prediction markets, saying it violates the First Amendment.
On Wednesday, US President Donald Trump said it was critically important that the CFTC maintain sole authority over prediction markets, echoing CFTC Chairman Michael Seligl.
Kalshi recently obtained similar preliminary injunctions against enforcement attempts in New Jersey and Arizona.
Prediction markets face challenges outside the United States and were banned last week in countries including Indonesia, Spain and India.
The US government is investigating prediction markets, with a House of Representatives committee investigation confirmed last week.
