Kalshi Sues Minnesota Over New Ban on Prediction Markets

Kalshi filed a federal lawsuit Wednesday in the U.S. District Court for the District of Minnesota seeking to block a state law that bans prediction markets. The complaint names Gov. Tim Walz, Attorney General Keith Ellison and other state officials and requests a temporary restraining order and an injunction before the law takes effect on Aug. 1. The company argues the law conflicts with federal authority and would force it to restrict access to its platform in Minnesota.

In the complaint, Kalshi contends the statute violates the Supremacy Clause by regulating markets the Commodity Futures Trading Commission regards as under federal jurisdiction. The filing says the law would ‘brand the predictions market as a felon in the eyes of Minnesota' and would inflict irreparable harm on Kalshi’s ability to operate as a 50-state derivatives exchange, requiring complex and costly technological steps to block Minnesota users.

Less than 24 hours after Walz signed the ban earlier this month, the Commodity Futures Trading Commission and the Department of Justice sued Minnesota and the governor, asserting federal authority over prediction market products. CFTC Chair Michael Selig wrote in a statement: ‘CFTC-registered exchanges have faced an onslaught of lawsuits seeking to limit Americans' access to event contracts and undermine the CFTC's sole regulatory jurisdiction over prediction markets.'

State officials supporting the bans argue prediction markets violate state gambling and sports-betting laws. Several states have moved to limit or bar these platforms, prompting legal challenges from exchanges and federal regulators.

The CFTC has filed suits in recent months against Wisconsin, Illinois, Arizona, Connecticut and New York, saying those states interfered with federally regulated exchanges. Rhode Island officials last week sued Kalshi and Polymarket, accusing the platforms of unlawful sports gambling; the CFTC then filed a separate complaint against Rhode Island.

Kalshi's complaint describes operational and financial impacts if Minnesota enforces the ban, saying removal of access in one state would undermine its national exchange model and impose nonrecoverable costs. The company asks the court to prevent state officials from enforcing the law while the litigation proceeds.

A spokesperson for Gov. Walz's office did not immediately respond to a request for comment. The case remains pending in U.S. District Court.