WASHINGTON — The Commodity Futures Trading Commission today filed a lawsuit against Minnesota to block a new state law, signed by Governor Tim Walz, that would make operating or assisting in the operation of a prediction market a criminal felony.  The CFTC is seeking a preliminary injunction to stop the law from going into effect on August 1, 2026.

Minnesota is one of the largest agricultural producers in the United States. The Minnesota government has nonetheless enacted a state law criminalizing trading in many CFTC-regulated markets with a broader reach than any other state the CFTC has sued to date, including criminalizing weather-related event contracts.  The new legislation represents the most aggressive move by a state to shut down CFTC-regulated markets and undermine the federal regulatory regime set up by Congress more than 50 years ago. 

“This Minnesota law turns lawful operators and participants in prediction markets into felons overnight,” said CFTC Chairman Michael S. Selig. “Minnesota farmers have relied on critical hedging products on weather and crop-related events for decades to mitigate their risks. Governor Walz chose to put special interests first and American farmers and innovators last.”

In a lawsuit filed by the CFTC, a federal court in Arizona recently issued a preliminary injunction blocking Arizona from using its gambling laws to criminally prosecute prediction market operators.  The Commission has also filed lawsuits against Connecticut, Illinois, and New York, and has filed amicus briefs in the U.S. Court of Appeals for the Sixth and Ninth Circuits and the Supreme Judicial Court of Massachusetts.