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On Monday, Minnesota Governor Tim Walz signed a bill — SF 4760 — to completely ban prediction markets. The next morning, the CFTC responded in kind, showing up with a lawsuit in hand.
That is not “we will look into this.” It’s “meet me outside immediately.”
So what did Minnesota actually do?
Minnesota became the first state in America to outright ban prediction markets.
The new law makes it a felony to operate, promote, host, or assist prediction market platforms inside the state starting August 1.
That includes markets where users trade on outcomes involving the following:
- Sports
- Elections
- Government decisions
- Weather events
- Entertainment outcomes
- Economic events
Basically, if people are wagering on whether something will happen, Minnesota wants no part of it.
And lawmakers did not just target the platforms themselves. The law reportedly stretches to:
- Advertisers
- Payment processors
- Affiliates
- Media partners
- Service providers
Why is the CFTC furious?
The CFTC argues prediction markets are federally regulated markets, not ordinary gambling verticals. And under federal law, the CFTC claims it has “exclusive jurisdiction” over them.
Minnesota says, “This activity is gambling.” The CFTC says, “Actually, this activity is finance.”
CFTC Chairman Michael Selig called Minnesota’s law “the most aggressive move” any state has taken against prediction markets so far. He also warned the law could criminalize legitimate operators overnight.
And then things got even stranger.
Somehow farmers got pulled into this too
One of the CFTC’s biggest arguments involves agriculture.
The agency says Minnesota’s law could interfere with weather and crop-related markets that farmers use farmers use as a hedge against financial stress.
The agency said these kinds of contracts have existed for decades and are important financial tools, especially in agricultural states like Minnesota.
On the other hand, critics are saying weather hedging is not remotely the same thing as betting on elections or sports.
While they can’t find common ground just yet, the CFTC has already taken legal action against multiple states trying to restrict prediction markets, including Arizona, Connecticut, Illinois, and New York.
Some courts have sided with the federal government. Others have shown more sympathy toward state gambling regulators.
What happens next?
The CFTC is asking the court for a preliminary injunction before the law takes effect on August 1.
If the court grants that request, Minnesota could temporarily lose the ability to enforce the ban while the lawsuit continues.
If the state wins instead, prediction markets could face one of the harshest crackdowns yet in the United States.
And honestly, this fight may eventually end up reaching the Supreme Court. Because underneath all the gambling arguments, this case is really about power. Who controls prediction markets?
- Federal regulators
- State governments
- Gambling commissions
- Congress
Right now, everybody wants the answer to be “us.”
