The CFTC has already sued to prevent the law's enforcement.
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Minnesota is the latest state to try and curtail the activities of prediction markets like Kalshi and Polymarket. Governor Tim Walz signed a bill that included a number of public safety provisions, including a ban on those markets operating within the state. The provisions are slated to take effect on August 1, but they are already facing challenges.
This appears to be the first attempt by a state to regulate prediction markets via legislation rather than lawsuits, but the lawsuits haven't gotten off to a good start. Three of the states that have embarked on legal cases against these businesses were sued by the US Commodity Futures Trading Commission, which claims that only it has the power to oversee prediction markets. The CFTC filed an amicus brief last week to intervene in an additional lawsuit in Ohio.
The federal regulator has also hopped onto the Minnesota law, but rather than making the same case, its argument is that the law would prevent weather-related predictions made by farmers to hedge against crop losses. NPR reported that an updated version of the law with an exception for that agricultural application is likely to be approved.
