Prediction marketplace Kalshi filed a federal lawsuit against a Minnesota bill to criminalize the operation, hosting or promotion of such a platform in the state starting August 1.
The filing follows a motion filed by the Commodity Futures Trading Commission (CFTC) on May 19, the day after Governor Tim Walz signed the law, arguing that the legislation violated the United States Constitution by criminalizing at the state level the operation of prediction markets governed by federal regulators.
In his filing, Kalshi claimed that the law violates the constitution’s Supremacy Clause, which says the federal Commodity Exchange Act (CEA) gives the CFTC “exclusive jurisdiction” over derivatives and swaps traded on designated contract markets (DCM).
The platform also challenged a provision that criminalizes the marketing or advertising of prediction markets, saying it violated the First Amendment.
On Wednesday, US President Donald Trump said it was vitally important that the CFTC maintain exclusive authority over prediction markets, echoing CFTC Chairman Michael Seligl.
Kalshi recently won similar preliminary injunctions against law enforcement attempts in New Jersey and Arizona.
Prediction markets face challenges outside the United States and were banned last week in countries including Indonesia, Spain and India.
The US government is conducting an investigation into prediction markets, and a House committee investigation was confirmed last week.
