Kalshi Snaps Back at Minnesota, Files Lawsuit

Kalshi has joined the Commidity Futures Trading Commission (CFTC) in launching a formal complaint against the State of Minnesota over the latter’s signing into law a draft bill that would effectively prohibit and outlaw prediction markets starting on August 1, 2026.

Kalshi Joins the Legal Fray Against Minnesota with a Complaint of Its Own

The state has already drawn regulatory flak from the CFTC, and Kalshi is now joining the fray, seeking to secure an injunction against the state that would block the enforcement of the law. This is part of a sprawling legal effort to stop local lawmakers from imposing restrictions on prediction market platforms – specifically over the offer of sports event contracts.

The CFTC has already filed a lawsuit against Illinois, New York, Connecticut, and Arizona, and President Donald Trump offered a rare endorsement of the sector, while blasting critics and arguing that they were “SCUM.” 

Under SF 3432, now signed into law by Gov. Tim Walz, the state would not only outlaw prediction markets but also criminalize their operations. According to Kalshi, this violates the Supremacy Clause of the US Constitution, with the state trying to preempt CFTC’s regulatory remit in the sector.

In fact, argues Kalshi in its complaint, the CFTC has exclusive jurisdiction over  contracts, and specifically those “traded on designated contract markets.” Kalshi is also bringing the First Amendment, arguing that its rights have been violated. 

However, Minnesota attorney general, Kieth Ellison is not looking to back down either, with his office releasing the following statement: 

“I’m very concerned about the harms of prediction markets on Minnesotans. Prediction markets are designed to be addictive and prey especially on young people and low-income folks. They help the ultra-rich get richer, and the rest of us get poorer. My office and I are reviewing this lawsuit and will respond in court.” 

Prediction Markets Facing Pushback Globally 

But the prediction market is not only facing scrutiny in the United States. In fact, multiple jurisdictions have either banned the companies from operating locally or are currently reviewing their existing businesses.

Spain has issued a temporary blocking order against Polymarket and Kalshi while conducting a three-to-four-month review, and so has South Korea. 

Meanwhile, Indonesia has gone right ahead, banning Polymarket, purportedly over a market that queried users whether the country’s incumbent President would make it to the end of his term.