CFTC Sues Minnesota Over Prediction Market Felony Law

The Commodity Futures Trading Commission filed a lawsuit against Minnesota on May 19, 2026, seeking to block a new state law that would criminalize operating or assisting in prediction markets.

The Legal Challenge

The CFTC is requesting a preliminary injunction to prevent the law from taking effect on August 1, 2026.

Minnesota's law would make trading in many CFTC-regulated markets a criminal felony, including weather-related event contracts. The Commission argues this represents the most aggressive state effort yet to shut down federally regulated markets.

Federal vs. State Authority

"This law turns lawful operators and participants into felons," said CFTC Chairman Michael S. Selig. He emphasized that Minnesota farmers rely on hedging products for weather and crop-related events to manage their financial risks.

The CFTC states the law undermines the federal regulatory regime established over 50 years ago.

Broader Enforcement Campaign

This lawsuit is part of a larger federal pushback against state-level interference:

• The CFTC recently obtained a preliminary injunction blocking Arizona from using gambling laws to prosecute prediction market operators
• The Commission has also filed lawsuits against Connecticut, Illinois, and New York
• It has submitted amicus briefs in both federal and state courts

What's at Stake

The outcome could set a critical precedent for whether states can criminalize activity that falls under federal commodities regulation. For Minnesota farmers, the immediate concern is access to weather and crop hedging products that could become illegal under state law.