Kalshi sues Minnesota, joining forces with the CFTC to defend the legal status of prediction markets

According to CoinDesk, the prediction market platform Kalshi has filed a federal lawsuit regarding a new law in Minnesota that will take effect on August 1, which classifies the operation, hosting, or promotion of prediction market platforms as a criminal offense. Kalshi argues that the law is unconstitutional, claiming it infringes upon the exclusive federal jurisdiction over derivatives markets granted to the CFTC by the Commodity Exchange Act, and violates the First Amendment on the grounds of restricting advertising.

Previously, the CFTC had filed a motion on May 19, also claiming that the state legislation is unconstitutional. U.S. President Trump has also publicly expressed support for the CFTC's singular regulatory authority over prediction markets. Kalshi has previously won a preliminary injunction in similar enforcement actions in New Jersey and Arizona.