{"id":73319,"date":"2026-05-30T22:20:49","date_gmt":"2026-05-30T22:20:49","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/kalshi-sues-minnesota-to-block-first-us-felony-ban-on-prediction-markets\/"},"modified":"2026-05-30T22:20:49","modified_gmt":"2026-05-30T22:20:49","slug":"kalshi-sues-minnesota-to-block-first-us-felony-ban-on-prediction-markets","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/kalshi-sues-minnesota-to-block-first-us-felony-ban-on-prediction-markets\/","title":{"rendered":"Kalshi Sues Minnesota to Block First US Felony Ban on Prediction Markets"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<p><span style=\"font-weight:400\"><\/p>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<h2 class=\"m-0 flex items-center gap-s text-[19px] !text-[#1c1c1c] md:text-[20px]\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"10\" viewbox=\"0 0 16 10\" fill=\"none\" class=\"shrink-0 text-success-100\" aria-hidden=\"true\"><path d=\"M1 1.5h14\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><path d=\"M1 8.5h10\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><\/svg><span>Key Takeaways<\/span><\/h2>\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Kalshi sued the state of Minnesota on May 28 to block SF4760, a felony ban set to take effect August 1, 2026.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">The CFTC filed its own suit against Minnesota within 24 hours of the bill\u2019s May 18 signing.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">More than a dozen states have moved against Kalshi; the case could decide who regulates the sector.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<p><\/span><\/p>\n<h2><span style=\"font-weight:400\">Minnesota\u2019s First-in-Nation Felony Ban<\/span><\/h2>\n<p><span style=\"font-weight:400\"><a href=\"https:\/\/srt.bitcoin.com\/kalshi-may\" target=\"_blank\" rel=\"noopener noreferrer\">Kalshi<\/a>, a federally regulated <span>prediction market<\/span> where users trade contracts on the outcome of real-world events, asked a federal court to strike down Minnesota\u2019s SF4760, a law it says would criminalize its business in the state. Governor Tim Walz <\/span><span style=\"font-weight:400\">signed the measure on May 18<\/span><span style=\"font-weight:400\">, and it is set to take effect on August 1, 2026, making Minnesota the first U.S. state to treat the operation and advertising of <span>prediction markets<\/span> as a felony.<\/span><\/p>\n<p><span style=\"font-weight:400\">The lawsuit, <\/span><a href=\"https:\/\/www.fox9.com\/news\/kalshi-sues-state-minnesota-prediction-market-ban-may-28\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight:400\">filed on May 28<\/span><\/a><span style=\"font-weight:400\">, argues the ban cannot stand because <a href=\"http:\/\/www.bitcoin.com\/get-started\/what-are-prediction-markets\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">prediction markets<\/a> are not gambling products but federally regulated derivatives. Kalshi contends that Minnesota is attempting to outlaw an activity that Congress placed under exclusive federal oversight.<\/span><\/p>\n<p><span style=\"font-weight:400\">At the heart of Kalshi\u2019s case is the claim that the state law intrudes on the authority of the Commodity Futures Trading Commission (CFTC), the federal agency that regulates derivatives markets. Kalshi argues that its event contracts qualify as swaps under the Commodity Exchange Act, the federal statute that grants the CFTC exclusive jurisdiction over such instruments, and that a state cannot override that framework by reclassifying them as gambling.<\/span><\/p>\n<p><span style=\"font-weight:400\">The company also says the ban violates the First Amendment by restricting its ability to advertise a lawful financial product. Together, the arguments frame Minnesota\u2019s law as both an overreach into federal territory and an unconstitutional limit on commercial speech.<\/span><\/p>\n<h2><span style=\"font-weight:400\">The CFTC Joins the Fight<\/span><\/h2>\n<p><span style=\"font-weight:400\">Kalshi is not litigating alone. The CFTC <\/span><a href=\"https:\/\/www.cftc.gov\/PressRoom\/PressReleases\/9233-26\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight:400\">filed its own federal lawsuit<\/span><\/a><span style=\"font-weight:400\"> against Minnesota less than 24 hours after Walz signed the bill, asking a court for a preliminary injunction to stop the law from taking effect before the dispute is resolved. The agency argues that Congress granted it exclusive oversight of event contracts and that state gambling statutes cannot displace that authority.<\/span><\/p>\n<figure id=\"attachment_818450\" aria-describedby=\"caption-attachment-818450\" style=\"width:742px\" class=\"wp-caption aligncenter\"><figcaption id=\"caption-attachment-818450\" class=\"wp-caption-text\">Image source: CFTC<\/figcaption><\/figure>\n<p><span style=\"font-weight:400\">A ruling against Minnesota would reinforce the position that <a href=\"http:\/\/www.bitcoin.com\/get-started\/what-are-prediction-markets\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">prediction markets<\/a> answer to Washington, not state capitals; a ruling for the state could embolden dozens of others weighing similar bans.<\/span><\/p>\n<p><span style=\"font-weight:400\">Minnesota is only the latest battleground as Kalshi and its rivals have faced a wave of state-level pushback over the past year, with regulators and courts split on whether their contracts are legitimate derivatives or thinly disguised betting. <a href=\"https:\/\/www.bitcoin.com\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">Bitcoin.com<\/a> News has reported that <\/span><a href=\"https:\/\/news.bitcoin.com\/washington-state-targets-kalshi-in-illegal-online-betting-lawsuit\/\"><span style=\"font-weight:400\">Washington State sued Kalshi<\/span><\/a><span style=\"font-weight:400\"> over alleged illegal online betting, while <\/span><a href=\"https:\/\/news.bitcoin.com\/arizona-challenges-kalshis-federal-status-with-unlicensed-gambling-charges\/\"><span style=\"font-weight:400\">Arizona challenged<\/span><\/a><span style=\"font-weight:400\"> the platform\u2019s federal status with unlicensed gambling charges.<\/span><\/p>\n<p><span style=\"font-weight:400\">The CFTC has mirrored Kalshi\u2019s courtroom strategy elsewhere, suing <\/span><a href=\"https:\/\/news.bitcoin.com\/cftc-sues-new-york-as-prediction-markets-fight-escalates\/\"><span style=\"font-weight:400\">New York<\/span><\/a><span style=\"font-weight:400\"> and <\/span><a href=\"https:\/\/news.bitcoin.com\/cftc-sues-wisconsin-over-prediction-market-ban\/\"><span style=\"font-weight:400\">Wisconsin<\/span><\/a><span style=\"font-weight:400\"> over comparable restrictions. <\/span><span style=\"font-weight:400\">The fight has also drawn in other crypto-linked firms, with <\/span><a href=\"https:\/\/news.bitcoin.com\/coinbase-sues-3-states-as-prediction-markets-trigger-federal-versus-gambling-law-clash\/\"><span style=\"font-weight:400\">Coinbase suing three states<\/span><\/a><span style=\"font-weight:400\"> as the federal-versus-gambling clash widened, and <\/span><span style=\"font-weight:400\">38 attorneys general<\/span><span style=\"font-weight:400\"> backing a Massachusetts lawsuit against Kalshi. <\/span><\/p>\n<p><span style=\"font-weight:400\">Outcomes have varied as a <\/span><a href=\"https:\/\/news.bitcoin.com\/nevada-court-rules-kalshi-event-contracts-align-with-gambling-laws\/\"><span style=\"font-weight:400\">Nevada court ruled<\/span><\/a><span style=\"font-weight:400\"> that Kalshi\u2019s event contracts align with state gambling laws, even as <\/span><a href=\"https:\/\/news.bitcoin.com\/new-jersey-loses-bid-to-shut-down-kalshi-sports-contracts-after-federal-appeal\/\"><span style=\"font-weight:400\">New Jersey lost a bid<\/span><\/a><span style=\"font-weight:400\"> to shut down the platform\u2019s sports contracts on appeal.<\/span><\/p>\n<h2><span style=\"font-weight:400\">What Comes Next<\/span><\/h2>\n<p><span style=\"font-weight:400\">With the August 1 effective date approaching, the immediate test is whether a court grants the CFTC\u2019s requested injunction and pauses Minnesota\u2019s law before it can be enforced. A delay would buy Kalshi time and keep the platform operating in the state while the broader question works through the courts.<\/span><\/p>\n<p><span style=\"font-weight:400\">That said, the deeper issue is unlikely to be settled in a single ruling, and until an appeals court (or Congress) draws a clear line between federally regulated event contracts and state-governed gambling, <a href=\"http:\/\/www.bitcoin.com\/get-started\/what-are-prediction-markets\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">prediction market<\/a> operators will keep fighting the same battle state by state, with Minnesota now at the front of the line.<\/span><\/p>\n<p> <!-- --><\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/kalshi-sues-minnesota-prediction-market-felony-ban-2026\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) Key Takeaways Kalshi sued the state of Minnesota on May 28 to block SF4760, a felony ban set to take effect August 1, 2026. The CFTC filed its own suit against Minnesota within 24 hours of the bill\u2019s May 18 signing. More than a dozen states have moved [&hellip;]<\/p>\n","protected":false},"author":3947362404,"featured_media":73320,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/73319"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/3947362404"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=73319"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/73319\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/73320"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=73319"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=73319"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=73319"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}