CFTC Sues Minnesota to Block Prediction-Market Felony Law
The CFTC sued Minnesota to block SF 4760, signed May 18, which would make operating prediction markets a felony, and requested a federal preliminary injunction.
The Commodity Futures Trading Commission filed suit in federal court on Tuesday seeking to block Article 8 of Minnesota’s SF 4760. The agency asked a judge for a preliminary injunction to prevent the provision from taking effect on Aug. 1, 2026.
The CFTC says Article 8 would criminalize a wide range of event contracts. The statute outlaws wagering platforms covering sports, elections, weather, disasters, legal proceedings and pop culture. It also makes it a felony to create, operate, facilitate, provide data for, process payments for or advertise such markets in Minnesota.
The agency warned the law could turn lawful market participants and service providers into felons. The complaint contends the statute reaches beyond platform operators to third parties such as data providers and payment processors, which the CFTC says could chill market infrastructure and risk-management tools.
Minnesota ranks among the nation’s largest agricultural producers. The CFTC highlighted that the law specifically targets weather-related event contracts that farmers use to hedge crop and weather risks.
In a statement, CFTC Chairman Michael S. Selig called the law a sudden criminalization of lawful activity and added: “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 lawsuit asks the court to block enforcement while the legal challenge proceeds. The CFTC argues that allowing individual states to criminalize activity the agency treats as federally regulated event contracts would conflict with federal law and with the commission’s exclusive authority to oversee those markets.
The Minnesota case follows related legal fights in other states. A federal judge in Arizona recently issued a preliminary injunction preventing state officials from using that state’s gambling laws to prosecute prediction market operators. The CFTC has also expressed concerns about measures or enforcement approaches in Connecticut, Illinois and New York.
SF 4760 was enacted as part of a broader public safety bill signed by the governor on May 18, 2026. If the court denies the CFTC’s request, the felony provisions would take effect Aug. 1. The judge’s ruling on the preliminary injunction will determine whether the contested provisions can be enforced while the dispute moves through the courts.
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