The U.S. Commodity Futures Trading Commission has asked a federal court to expedite its ruling against Minnesota before the state’s prediction-market ban takes effect on Aug. 1.
Summary
- Minnesota’s ban takes effect Aug. 1, leaving the court only days to decide on injunctive relief.
- Kalshi and Polymarket joined the CFTC’s request for a temporary administrative stay.
- The CFTC may seek emergency appellate relief if the district court does not act promptly.
- Industry groups argue that one federal framework should govern regulated event contracts across the United States.
CFTC presses court as Aug. 1 deadline approaches
The CFTC requested expedited handling of its motion for a preliminary injunction, according to its latest court filing. The regulator said a decision is needed before Minnesota’s new law takes effect later this week.
Minnesota Governor Tim Walz signed the measure in May. It makes creating, operating, facilitating, or advertising a prediction market in the state a criminal offense.
The CFTC sued Minnesota on May 19, arguing that the state law interferes with the federal derivatives framework established under the Commodity Exchange Act. The agency asked the court to block enforcement while the wider legal dispute proceeds.
A hearing has already taken place, but the judge has not ruled on the preliminary injunction request. The Commission said it would treat the motion as constructively denied if the court neither issues a decision nor temporarily stays the law by July 28.
In that event, the regulator plans to seek interim relief from the federal appeals court.
Kalshi and Polymarket join request for temporary stay
Kalshi and Polymarket have filed separate challenges seeking to stop Minnesota from enforcing the ban. Both platforms joined the request for a temporary administrative stay while the court considers their preliminary injunction motions.
The companies also indicated that they would treat their motions as constructively denied if the court does not act by the stated deadline. They could then pursue relief at the appellate level alongside the CFTC.
The dispute centers on whether event contracts offered through federally regulated exchanges fall exclusively under the CFTC’s authority or may also be restricted through state gambling laws.
Minnesota considers prediction markets a form of gambling that can expose residents to addiction and financial harm. CFTC Chair Michael Selig has taken the opposing position, arguing that Minnesota’s law would turn federally regulated operators and participants into felons.
For U.S. users, the ruling could determine whether access to prediction markets depends on their state of residence. A decision favoring Minnesota may also encourage other states to pursue direct bans or enforce gambling rules against event-contract platforms.
CFTC tightens oversight of event-contract filings
The court fight does not mean the CFTC supports unrestricted prediction markets. The agency has also increased its scrutiny of how registered exchanges introduce new event contracts.
As crypto.news previously reported, the CFTC issued its second warning of the year on July 24 over broad, template-style self-certification filings. Its Division of Market Oversight instructed exchanges to provide contract-specific terms, settlement procedures, data sources and compliance analysis.
Designated contract markets may still use self-certification to list qualifying contracts without waiting for advance Commission approval. However, the regulator said one filing cannot cover an open-ended range of contract variations unless it includes enough detail for each product.
The advisory shows that the federal-state dispute concerns regulatory authority rather than whether prediction markets should operate without oversight. The CFTC maintains that federally registered platforms must follow the Commodity Exchange Act and the agency’s rules, including product-level disclosure requirements.
Federal prediction-market framework gains support
The Minnesota case comes as the CFTC considers broader rules for event contracts. Its proposal would guide reviews of contracts linked to gaming, war, terrorism, assassination and conduct that violates federal or state law.
The public comment period closed on July 27. Hyperliquid Policy Center and Multicoin Capital submitted a joint filing supporting written federal standards.
The groups argued that exchange-traded contracts differ from traditional wagers because participants trade with each other rather than against a bookmaker.
“A bet with a bookmaker is a wager against the house: the house sets the odds and wins when you lose. An exchange-traded contract is a trade between two willing participants at a market price, and the venue’s business is matching that trade for a fee, whichever side wins.”
Hyperliquid Policy Center and Multicoin said forcing registered platforms to comply with 50 separate state gambling regimes would fragment the federal market structure. Minnesota maintains that states retain authority to protect residents from products they view as unlicensed gambling.
The immediate question now rests with the federal court. A ruling or temporary stay before Aug. 1 would preserve current access while the litigation continues, while no action could send the CFTC, Kalshi and Polymarket directly to the appeals court.
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