Minnesota lawmakers have advanced legislation aimed at restricting prediction markets such as Kalshi and Polymarket, setting up a clash with the Commodity Futures Trading Commission, which argues federal law gives it exclusive authority over many of those products.
Minnesota lawmakers have moved to clamp down on so-called prediction markets—platforms that let users trade contracts tied to future events—prompting a fast-moving dispute over whether the state can police activity that federal regulators treat as derivatives trading.
In the Minnesota House, Democratic-Farmer-Labor Rep. Emma Greenman of Minneapolis has been a leading proponent of restricting prediction-market activity, including platforms such as Kalshi and Polymarket, according to Minnesota Public Radio News and House materials tied to the legislation.
The federal Commodity Futures Trading Commission (CFTC) has pushed back broadly against state efforts to block or criminalize prediction markets. In a May 2026 lawsuit announced by the agency, the CFTC said Minnesota enacted a law that would make operating or assisting in the operation of a prediction market a felony, and argued the measure unlawfully intrudes on federal authority under the Commodity Exchange Act.
The lawsuit is part of a wider pattern of conflict between state gambling regulators and the CFTC, which in recent months has filed or supported federal-court actions challenging state restrictions on CFTC-regulated event contracts, including disputes involving Kalshi and other operators.
Minnesota’s debate has drawn warnings from opponents that litigation is likely if the state proceeds. During committee and floor discussions reported by MPR News, Republican House Leader Harry Niska said the state would be buying at least one lawsuit if it passed the measure.
Supporters of the restrictions, including Greenman, have framed the issue as a question of Minnesota’s authority to regulate gambling and protect the public, while federal officials and prediction-market operators have argued the state is attempting to regulate federally supervised markets.
