CFTC Sues Minnesota to Block Law Banning Prediction Markets
The CFTC sued Minnesota to block SF 4760 and seeks a preliminary injunction against a law that would criminalize prediction markets and weather contracts used by farmers.
The U.S. Commodity Futures Trading Commission sued the state of Minnesota on Tuesday, asking a federal court to block Article 8 of SF 4760 and issue a preliminary injunction. The agency says the provision, set to take effect Aug. 1, 2026, would criminalize operating prediction markets and ban weather-related event contracts that farmers use to hedge risk.
Governor Tim Walz signed SF 4760 on May 18, 2026. Article 8 would make creating, operating, facilitating, providing data for, processing payments for or advertising prediction markets a felony in Minnesota. The text of the statute, the complaint says, reaches wagering platforms covering sports, elections, weather, disasters, legal proceedings, pop culture and other events.
The CFTC described the law as the most aggressive state effort to date to shut down markets it regulates and said the provision extends further than earlier state actions. The agency noted Minnesota ranks among the nation’s largest agricultural producers and says the statute directly targets weather-related event contracts that farmers have used for decades to manage crop and weather risk.
CFTC Chairman Michael S. Selig wrote in a statement accompanying the filing: “This Minnesota law turns lawful operators and participants in prediction markets into felons overnight. Minnesota farmers have relied on critical hedging products on 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.”
The complaint asks the court to keep Article 8 from taking effect while the agency’s legal challenge proceeds. The filing frames the dispute as a question of federal preemption and whether a state may impose criminal penalties on activities the CFTC regulates at the federal level.
The Minnesota case follows legal and regulatory disputes in Arizona, Connecticut, Illinois and New York over whether states can apply gambling or other laws to prediction markets. A federal court in Arizona recently issued a preliminary injunction barring that state from using its gambling laws to prosecute prediction market operators.
The outcome of the Minnesota litigation could affect whether states can criminalize event contracts that federal regulators consider within their jurisdiction.
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