Minnesota defends felony prediction market ban against Trump accusation filings
Minnesota has escalated its legal maneuvering as the state defends the nation's first felony prediction-market ban against federal and platform-led challenges. In a court filing, Minnesota's attorneys accused Donald Trump of self-interest in connection with prediction markets, citing Trump's expansion of a Crypto.com partnership through OG.com and Donald Trump Jr.'s investment in Polymarket. The filing comes as the state fights separate lawsuits from the Commodity Futures Trading Commission (CFTC), which sued Minnesota and Governor Walz to block the felony statute, and from platforms including Kalshi and Polymarket that are challenging the ban's validity. Minnesota's enforcement posture has made it a focal point in the broader clash between state criminal penalties and federal CFTC registration for event-contract trading.
Kalshi and Polymarket must now defend Minnesota accounts while the state attacks the Trump family's platform ties. The felony ban's survival determines whether other state legislatures copy the statute or retreat from criminal penalties against CFTC-registered platforms.
Minnesota now joins Rhode Island and New Mexico as states where Kalshi and Polymarket face parallel federal preemption cases alongside their own state-level legal fights.