CFTC seeks emergency ruling on Minnesota prediction market ban before Aug. 1

The U.S. Commodity Futures Trading Commission (CFTC) is asking a federal court to accelerate a ruling blocking Minnesota’s prediction market ban before it takes effect on Aug. 1. Minnesota Governor Tim Walz signed the measure in May, making it a criminal offense to create, operate, facilitate, or advertise prediction markets in the state. CFTC filed the lawsuit on May 19 and argued the Minnesota prediction market ban conflicts with the federal derivatives framework under the Commodity Exchange Act. CFTC Chair Michael Selig warned that the ban could turn participants and federally regulated operators into felons “overnight.” A hearing has already taken place, but the judge has not yet granted a preliminary injunction. In the latest development, the CFTC requested expedited handling. If the court does not rule, or issue a temporary stay, by July 28, the agency plans to seek emergency relief from the federal appeals court. Kalshi and Polymarket have joined the request for a temporary administrative stay and may pursue further appellate action if deadlines are missed. The core dispute is whether “event contracts” traded via federally regulated exchanges fall only under CFTC authority, or whether states can restrict them through gambling-related laws. Minnesota says prediction markets can drive addiction and financial harm, while the CFTC argues the hedging and risk-mitigation benefits have long been used in sectors like weather- and crop-related forecasting. Broader context for traders: the article also notes the CFTC is tightening oversight of event-contract self-certification filings and developing wider rules for event contracts tied to prohibited categories. Similar legal battles are also occurring across states, adding to ongoing regulatory uncertainty around prediction markets. Trading takeaway: the near-term catalyst is legal timing. A fast injunction or stay could preserve access to prediction markets, while delay could heighten uncertainty and increase the odds that other states push similar bans—raising headline-driven volatility risk for crypto-adjacent betting/prediction activity.