Prediction market Kalshi filed a federal lawsuit against a Minnesota bill to criminalize operating, hosting or promoting such a platform in the state starting Aug. 1.
The filing follows a motion filed by the Commodity Futures Trading Commission (CFTC) on May 19, the day after the law was signed by Governor Tim Walz, which argued that the legislation violated the US Constitution by criminalizing the operation of prediction markets managed by federal regulators at the state level.
In his filing, Kalshi argued that the law violates the Supremacy Clause of the Constitution, which states that the federal Commodity Exchange Act (CEA) gives the CFTC “exclusive jurisdiction” over derivatives and swaps traded on designated contract markets (DCMs).
The platform also challenged a provision criminalizing the marketing or advertising of prediction markets, saying it violated the First Amendment.
On Wednesday, US President Donald Trump said it was extremely important that the CFTC retain sole authority over the prediction markets, echoing CFTC Chairman Michael Seligl.
Kalshi recently won similar preliminary injunctions against enforcement efforts in New Jersey and Arizona.
Prediction markets face challenges outside the US and have been banned in countries including Indonesia, Spain and India in the past week.
The US government is investigating the prediction markets, and a House investigation was confirmed last week.
