The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Minnesota, seeking to block a law that was signed by Governor Tim Walz that seeks to prohibit the operation of prediction markets, with a small exception - weather event contracts.
CFTC fires a response against Minnesota’s landmark ban on prediction markets
The law signed by Governor Walz is due to take effect on August 1, 2026, and comes after policymakers passed the measure with a strong majority. The CFTC is now pushing back, arguing that Minnesota is trying to preempt federal law and that the state does not have the power to actually regulate the vertical, which the regulator claims is its exclusive purview. Commenting on the recent developments, CFTC Chairman Michael S. Selig has said that by passing this law, Minnesota turned lawful operators and participants into felons overnight. Minnesota farmers have relied on critical hedging products for weather and crop-related events for decades to mitigate their risks. Governor Walz chose to put special interests first, and American farmers and innovators last, he noted. While the official case filed by the CFTC argues that the bill criminalizes weather-related event contracts, the state legislature has passed an amendment that Gov. Walz is expected to sign, addressing that particular pain point, as agriculture industry stakeholders have pointed out the validity and usefulness of those markets. The CFTC is hardly stopping at Minnesota, though, with the regulator filing similar cases against Arizona, Connecticut, Illinois, New York, and elsewhere.
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