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<p>Kalshi has sued Minnesota to block the state’s prediction market ban set to take effect on August 1.</p>
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 <div class="cn-block-summary__nav tabs"><span>Summary</span>
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   <li>Kalshi filed a federal lawsuit against Minnesota over its new prediction market ban law.</li>
   <li>The company argues the Commodity Exchange Act gives the CFTC exclusive jurisdiction over event contracts.</li>
   <li>Minnesota’s law would make operating a prediction market a felony from August 1.</li>
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<p>Kalshi has filed a federal lawsuit against Minnesota to block the state’s new prediction market ban. The law would make running an event contract platform in the state a felony from August 1.</p>
<p>The suit escalates a national fight over who regulates event contracts. Kalshi’s complaint, <a href="https://www.courthousenews.com/kalshi-and-minnesota/" rel="noopener noreferrer nofollow">filed</a> in federal court and documented by Courthouse News, names Attorney General Keith Ellison, Governor Tim Walz and Alcohol and Gambling Enforcement Director Jon Anglin as defendants.</p>
<h2 class="wp-block-heading" id="what-minnesota-s-law-does">What Minnesota’s law does</h2>
<p>Governor Walz signed SF 3432 into law on May 26, repealing and replacing earlier prediction market provisions in SF 4760 and folding the new measure into the state’s broader public safety package. The law bans operating any market offering certain event contracts.</p>
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<p>Kalshi argues the Commodity Exchange Act gives the CFTC “exclusive jurisdiction” over event contracts, and that Minnesota’s statute “impermissibly usurps” that authority by banning federally designated contract market activity. The company describes the law as “a targeted attack on federal DCMs.”</p>
<p>The Kalshi suit follows the CFTC’s own lawsuit against Minnesota filed a week earlier. Crypto.news previously <a href="https://crypto.news/minnesota-bans-prediction-markets-cftc-fires-back/" rel="noopener noreferrer nofollow">reported</a> on the CFTC challenge, which framed the law as the most aggressive state move to shut down federally regulated markets.</p>
<h2 class="wp-block-heading" id="why-this-fight-is-escalating">Why this fight is escalating</h2>
<p>Sports contracts now drive roughly 85% of Kalshi’s business, putting the platform at the centre of every state gambling case. The Ninth Circuit recently <a href="https://crypto.news/kalshi-polymarket-lose-2-state-gambling-appeals/" rel="noopener noreferrer nofollow">denied</a> emergency motions from Kalshi and Polymarket in Nevada and Washington cases, ruling federal derivatives oversight does not automatically pre-empt state gaming laws.</p>
<p>That ruling clashes with a Third Circuit decision siding with Kalshi against New Jersey, a split that could push the question to the Supreme Court. Recent state actions in Wisconsin, Nevada and Washington have all <a href="https://crypto.news/wisconsin-sues-kalshi-coinbase-polymarket-calls-prediction-markets-illegal-bets/" rel="noopener noreferrer nofollow">targeted</a> the same platforms.</p>
<p>Kalshi was last valued at $22 billion in a recent funding round, making the legal exposure material. The company seeks declaratory and injunctive relief to block enforcement before the August 1 effective date.</p>
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Kalshi sues Minnesota over prediction market ban

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