Kalshi Pushes Back With Lawsuit Against Minnesota Prediction Market Ban

Table of Contents Kalshi has opened a new federal court fight against Minnesota after the state moved to criminalize prediction markets from Aug. 1. The company argues that Minnesota’s law clashes with CFTC authority and violates constitutional protections. The lawsuit comes as the White House backs federal control and Kalshi builds a stronger policy campaign in Washington. Kalshi filed the lawsuit after Minnesota criminalized operating prediction markets. The law also targets hosting or promoting those platforms. Governor Tim Walz signed the bill after state officials moved against prediction market activity. Kalshi says Minnesota cannot police contracts traded on federally regulated markets. The company said the Commodity Exchange Act gives the CFTC “exclusive jurisdiction” over derivatives and swaps. Kalshi claims the measure violates the Constitution’s Supremacy Clause. Kalshi also challenged the rule that criminalizes prediction market marketing. The exchange said the provision violates the First Amendment. The CFTC raised a similar argument in a May 19 motion after Minnesota passed the law. The agency said Minnesota criminalized markets under federal supervision. Kalshi has won preliminary injunctions in New Jersey and Arizona. Those cases support its wider state-by-state legal campaign. The White House has started reviewing a proposal for CFTC prediction market rules. A Tuesday filing showed the Office of Management and Budget had the plan. The filing did not show the proposal’s details. However, it matched the CFTC’s claim that states should not control federally regulated markets. President Donald Trump supported that position in a Truth Social post on Tuesday. He wrote, “It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained.” Trump also said prediction markets should “thrive” under federal rules. He argued that America should stay ahead as other countries target the sector. CFTC Chairman Michael Selig earlier said the agency planned rules for prediction markets. He made the Jan. 29 comment while dropping a proposed sports and politics ban. As we reported this week, Kalshi helped launch Americans for Fair Markets to support prediction market advocacy. The group plans to shape federal policy talks in Washington. Taylor Budowich, a former senior Trump White House official, joined as strategic adviser. He handled communications for the White House and a Trump-aligned super PAC. Kalshi backed the group’s formation, while representatives said other members also joined. A spokesperson called the group well-funded but gave no figures. John Bivona, Kalshi’s head of government relations, joined the AFM board. He said, “Entrenched interests protecting their monopolies won’t outspend or out-organize us.” AFM launched as House Oversight Chairman James Comer announced probes into Kalshi and Polymarket. The probe covers possible insider trading tied to wagers before Venezuela and Iran military events. The American Gaming Association opposes prediction markets and calls sports contracts disguised betting. Its CEO Bill Miller called them “deceptively calling sports betting financial contracts and investing.”