Trump administration sues Minnesota to block state's outright ban on prediction markets

The US Commodity Futures Trading Commission filed a lawsuit against Minnesota after Gov. Tim Walz signed a law on Monday that makes it a felony to create, operate, or advertise a prediction market. The law is scheduled to take effect on August 1.

Minnesota's law defines a prediction market as a system allowing consumers to wager on future outcomes of specified events (sports, elections, weather, deaths, terrorism, wars, and others) not determined by the parties to the contract. The CFTC argues the law 'represents the most aggressive move by a state to shut down CFTC-regulated markets' and asks the court for preliminary and permanent injunctions to block enforcement.

CFTC Chairman Michael Selig said the law 'turns lawful operators and participants in prediction markets into felons overnight' and cited Minnesota farmers' decades-long use of hedging products on weather and crop events. Minnesota Attorney General Keith Ellison countered that prediction markets are 'designed to be addictive and prey especially on young people and low-income folks.'