CFTC sues Minnesota, claiming its comprehensive ban on prediction markets violates federal exclusive regulatory authority

According to The Block, the Commodity Futures Trading Commission (CFTC) and the Department of Justice jointly filed a lawsuit against Minnesota Governor Tim Walz and related officials on Tuesday local time, because the state signed the SF 4760 bill, becoming the first in the nation to explicitly and comprehensively ban prediction markets, which will take effect on August 1, 2026.

The CFTC argues that prediction markets fall under federally regulated derivatives and "swap" products, and that state governments do not have the authority to criminalize or prohibit them, requesting the court to issue a permanent injunction against the law.