Minnesota enacts first state ban on Kalshi and Polymarket as Trump administration sues to block it
Minnesota enacted the nation's first state-level ban targeting prediction market platforms, naming Kalshi and Polymarket specifically and criminalizing their operation and certain trading activity in the state. The Trump administration filed a federal lawsuit on May 22, 2026, the same day the ban was signed, seeking to block the law on the grounds that it is preempted by federal commodity futures law and interferes with CFTC jurisdiction. The administration argues that prediction-market platforms do not fall under state gambling laws, challenging the traditional state authority to regulate gambling. The dual action creates a direct federal-state legal showdown over which level of government has the power to regulate event contracts.
The CFTC's direct involvement in Minnesota gives Kalshi federal institutional backing it lacked when it sued Ohio alone last October. A preemption win arms the agency's parallel challenges against Wisconsin and deflects Pennsylvania's separate opposition filing.
Kalshi and Polymarket now face active state enforcement in Rhode Island, Ohio, Kentucky, Massachusetts, and Utah alongside tribal challenges in New Mexico and Wisconsin, while the CFTC simultaneously fights federal preemption battles in Minnesota and Wisconsin.