On May 19, 2026, the U.S. Commodity Futures Trading Commission (CFTC) sued the State of Minnesota in federal court, asking for a preliminary injunction. This happened just a day after Governor Tim Walz signed SF 4760, a public safety bill that passed with strong bipartisan support. The federal challenge targets a new law, Minn. Stat. § 609.7615, which makes it a felony to run, host, support, advertise, or provide services to a prediction market. The law takes effect on August 1, 2026, and seems to be the first state law to directly ban prediction markets.

Most coverage of the bill has described it as a ban on Kalshi and Polymarket like some sort of political agenda, but that misses the main point. Yes, we won’t be able to trade on prediction markets, but we also can’t bet on sports. Under §609.7615, subdivision 2, a person commits a felony if, for payment and as part of a business, they do any of the following:

1. create the prediction market;
2. operate, manage, or control the platform;
3. facilitate the operation by listing events, holding consumer money, setting odds, or acting as a counterparty;
4. provide data, information, or verification services to the market; or
5. provide supportive services that identify a consumer’s location, transfer money, or process payments.

Subdivision 3 of § 609.7615 is a separate felony covering the advertising or marketing of financial or technological products that promote the prohibited transactions.

Minnesota’s law is different from many other states because it puts the toughest penalties on businesses and service providers, not on people who use prediction markets. The main idea is that those who create, run, or support these markets are responsible for following the law, so regular residents who make trades are not affected legally.

Most U.S. tech laws that affect consumers put the responsibility on the user👇🏻

• Federal know-your-customer rules require consumers to verify their identities.
• State gambling laws treat the individual placement of a bet as an offense.
• App store age gates ask users to confirm their age.

The consumer does the work of complying with the law, and the platform gets credit for following it.

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This is different from most laws that require users to comply. Minnesota’s prediction-markets law does the opposite by making platforms and their suppliers responsible. For example, if a Minnesotan is blocked from using Kalshi or another CFTC-regulated site on August 1, the user is not investigated or punished. Instead, the platform operator and payment processor are held liable. The same idea is used in the social media warning-label law, where the platform must show the warning, and in the Minnesota Consumer Data Privacy Act, where the company controlling the data is responsible, not the person whose data is collected.

In practice, platforms will block Minnesota users, payment processors will likely reject transactions from Minnesota, and advertisers will stop their campaigns. None of these companies can shift the compliance burden to Minnesotans because the law targets the companies directly. However, this only works if Minnesota law can actually reach these companies, which is what the federal court is deciding. If the court finds that platforms and payment systems are under federal control, the state will not be able to enforce the law.

The prediction-markets law is the newest in a series of Minnesota tech laws that side with consumers instead of institutions.

In all these laws, the responsibility is on the company, not the regular person. Many other states either wait for federal guidance or make users do things like age verification. Minnesota does neither. Instead, it acts quickly and puts enforcement on platforms, data brokers, payment processors, and ad networks. This approach is harder to write and defend in court because it involves federally regulated companies, but it could last longer if it survives legal challenges.

Turning to federal-state dynamics, the CFTC argues that event contracts traded on CFTC-regulated markets fall within its exclusive jurisdiction and that state criminal or gambling-law restrictions are preempted. The agency has filed similar suits or related actions against Arizona, Connecticut, Illinois, New York, and Wisconsin, and is asking the Minnesota federal court to resolve the same preemption question here. On May 5, 2026, the U.S. District Court for the District of Arizona granted the CFTC a preliminary injunction on the same theory, finding that the Commodity Exchange Act preempts state enforcement on field, obstacle, and impossibility grounds.

As these laws take effect, Minnesotans will notice real changes. When § 609.7615 starts on August 1, the most obvious change will be that platforms and their partners will block Minnesota users or leave the market. This will likely include Kalshi, Polymarket, Crypto.com (and its Nadex-affiliated U.S. derivatives company), Robinhood, and Coinbase, depending on how they operate. Platforms that block Minnesota users before August 1 are choosing to follow the law, while those that stay are choosing to fight it in court. Payment processors like Stripe, ACH banks, and crypto on-ramps are also affected, and transactions from Minnesota to these services will probably drop as companies try to comply. Advertising is also covered. Subdivision 3 makes it a separate felony to market banned products, so sports media, podcasts, and ad platforms will likely stop prediction-market ads in Minnesota. For most people, this will be the most noticeable effect of the law.

Whether these changes last depends on ongoing court cases. The CFTC wants a preliminary injunction before August 1, and the same court is also hearing NetChoice v. Ellison. Netchoice will decide if the social media warning-label law passes First Amendment review, while the CFTC case will decide if the prediction-markets law is blocked by federal law. The cases are about different legal issues, but both ask the same basic question: can a state regulate companies and infrastructure without targeting individual users?

If both laws are upheld, Minnesota’s main idea, that states can protect consumers by regulating platforms rather than individuals, could become a model for other states. If the laws are struck down, Minnesota may have to try more limited or slower approaches. These court cases are really about protecting residents without criminalizing them.

In all these laws, the responsibility is on the company, not the regular person. Many other states either wait for federal guidance or make users do things like age verification. Minnesota does neither. Instead, it acts quickly and puts enforcement on platforms, data brokers, payment processors, and ad networks. This approach is harder to write and defend in court because it involves federally regulated companies, but it could last longer if it survives legal challenges.

Turning to federal-state dynamics, the CFTC argues that event contracts traded on CFTC-regulated markets fall within its exclusive jurisdiction and that state criminal or gambling-law restrictions are preempted. The agency has filed similar suits or related actions against Arizona, Connecticut, Illinois, New York, and Wisconsin, and is asking the Minnesota federal court to resolve the same preemption question here. On May 5, 2026, the U.S. District Court for the District of Arizona granted the CFTC a preliminary injunction on the same theory, finding that the Commodity Exchange Act preempts state enforcement on field, obstacle, and impossibility grounds.

As these laws take effect, Minnesotans will notice real changes. When § 609.7615 starts on August 1, the most obvious change will be that platforms and their partners will block Minnesota users or leave the market. This will likely include Kalshi, Polymarket, Crypto.com (and its Nadex-affiliated U.S. derivatives company), Robinhood, and Coinbase, depending on how they operate. Platforms that block Minnesota users before August 1 are choosing to follow the law, while those that stay are choosing to fight it in court. Payment processors like Stripe, ACH banks, and crypto on-ramps are also affected, and transactions from Minnesota to these services will probably drop as companies try to comply. Advertising is also covered. Subdivision 3 makes it a separate felony to market banned products, so sports media, podcasts, and ad platforms will likely stop prediction-market ads in Minnesota. For most people, this will be the most noticeable effect of the law.

Whether these changes last depends on ongoing court cases. The CFTC wants a preliminary injunction before August 1, and the same court is also hearing NetChoice v. Ellison. Netchoice will decide if the social media warning-label law passes First Amendment review, while the CFTC case will decide if the prediction-markets law is blocked by federal law. The cases are about different legal issues, but both ask the same basic question: can a state regulate companies and infrastructure without targeting individual users?

If both laws are upheld, Minnesota’s main idea, that states can protect consumers by regulating platforms rather than individuals, could become a model for other states. If the laws are struck down, Minnesota may have to try more limited or slower approaches. These court cases are really about protecting residents without criminalizing them.

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