The US CFTC has filed a lawsuit against Minnesota's first state-level bill that explicitly bans prediction markets.

CoinFeed reported on May 20th that, according to The Block, the U.S. Commodity Futures Trading Commission (CFTC) and the Department of Justice have sued the state of Minnesota and its Governor Tim Walz, alleging that the state's newly signed omnibus bill illegally bans prediction markets. The lawsuit, filed less than 24 hours after Walz signed the bill, alleges that Minnesota is attempting to regulate federally regulated derivatives markets that fall under its "exclusive jurisdiction," marking the first time the U.S. has imposed a comprehensive ban on prediction markets. The CFTC and the Department of Justice argue that these are federally regulated products and swaps traded on exchanges approved by the CFTC, and the state government has no right to criminalize or prohibit them. This lawsuit is the latest escalation in a jurisdictional conflict between the state's gambling regulator and federally regulated prediction market platforms such as Kalshi and Polymarket.