Polymarket Sues Minnesota Over Prediction Market Ban

Polymarket has filed a lawsuit against the State of Minnesota, becoming the latest prediction market operator to challenge the state's new law banning event contracts.

The lawsuit follows Minnesota's recent effort to prohibit prediction markets, a move that has already drawn opposition from both Kalshi and the Commodity Futures Trading Commission. The state became the first in the country to pass a broad prohibition targeting prediction market platforms, prompting immediate legal challenges from industry participants.

Polymarket argues that Congress granted the CFTC exclusive authority over federally regulated event contracts and that Minnesota's law conflicts with that framework. The company is seeking to prevent state officials from enforcing the ban while the case proceeds through court.

Minnesota Faces Growing Legal Pressure

Minnesota's prediction market law has quickly become one of the industry's most closely watched regulatory battles.

The legislation, signed by Governor Tim Walz, makes it unlawful to operate, host, or promote prediction market platforms within the state. Supporters of the measure argue that sports and event contracts function similarly to gambling products and should be regulated under state gaming laws.

That position has already been challenged in court. Minnesota's Prediction Market Ban Triggers Federal Lawsuit examined the CFTC's decision to sue the state shortly after the law was enacted, arguing that federally regulated event contracts fall under federal jurisdiction rather than state authority.

Polymarket's complaint closely mirrors many of the arguments already raised by both the CFTC and Kalshi, which filed its own lawsuit against the state in May.

Another Front in the Prediction Market Debate

The Minnesota case has become a focal point in the broader dispute surrounding prediction markets in the United States.

While states such as Nevada, Illinois, and Rhode Island have pursued enforcement actions or regulatory challenges against prediction market operators, Minnesota took a different approach by passing legislation specifically designed to prohibit the activity altogether.

That decision has now triggered challenges from federal regulators and some of the industry's largest operators. With Kalshi, the CFTC, and now Polymarket all seeking to block enforcement of the law, Minnesota's courts could play a significant role in shaping how prediction markets are regulated moving forward.

The law is scheduled to take effect on August 1 unless a court intervenes before then.