Kalshi sues Minnesota to block nation's first felony prediction market ban
Prediction market platform Kalshi filed a federal lawsuit to block Minnesota from enforcing the nation's first state-level felony ban on prediction markets. Governor Tim Walz signed the bill into law this month after a Minnesota senator who was fined for insider trading on a prediction market proposed the statewide prohibition. The ban, which explicitly covers platforms including Kalshi and Polymarket, is scheduled to take effect in August. Kalshi's suit seeks to prevent the state from allowing the prohibition to go into force. The Trump administration, acting through the Commodity Futures Trading Commission, has also sued Minnesota over the same law, arguing state prohibition is preempted by federal law.
Kalshi's own suit gives the platform direct standing to argue federal preemption alongside the CFTC's parallel case, a tactical pairing it lacked in Ohio last October. A win arms both plaintiffs' challenges in Wisconsin and Pennsylvania while deflecting Rhode Island's separate enforcement push.
Kalshi's own suit joins the CFTC's parallel challenge and makes Minnesota the third active front where the firm's federal preemption defense is being tested, after Ohio last October and the simultaneous Rhode Island and tribal cases.