CFTC and DOJ sue Minnesota over nation's first explicit state ban on prediction markets!

The Commodity Futures Trading Commission and the U.S. Department of Justice filed suit against Minnesota, Governor Tim Walz, and several state officials on Tuesday — less than 24 hours after Walz signed SF 4760 into law. The complaint calls Minnesota's legislation "the first outright ban on prediction markets in the U.S." and argues the state is unlawfully encroaching on the CFTC's exclusive federal jurisdiction over derivatives and swaps.

The new law, set to take effect August 1, prohibits prediction markets covering everything from sports outcomes to company valuations to government events. The CFTC and DOJ contend these products trade on federally approved exchanges and cannot be criminalized at the state level. The complaint also flags that Minnesota's statute extends criminal liability to banks, payment processors, media organizations, and sports leagues — including MLB, NHL, Fox,…