Minnesota bans prediction markets, immediately criticized by Trump administration

The Trump administration yesterday sued Minnesota in an attempt to block the state’s first law banning prediction markets.

While other states have placed restrictions on prediction markets, Minnesota has banned them entirely in a the law Monday with Gov. Tim Walz on Monday. The US Commodity Futures Trading Commission he announced a a case against the state, saying that “Minnesota’s new law represents the most dangerous move by the state to close the markets regulated by the CFTC and undermine the federal regulatory regime established by Congress more than 50 years ago.”

“This Minnesota law turns legitimate operators and participants in the futures markets into criminals,” said CFTC Chairman Michael Selig. “Minnesota farmers have relied on critical factors in weather and crop-related events for years to reduce their risk.” Governor Walz chose to put special interests first and America’s farmers are the new champions.

Minnesota law makes it a crime to create, operate, or advertise a prediction market. The CFTC asked the court for a preliminary and permanent injunction barring Minnesota from implementing the law, which is set to take effect on August 1. The case was filed in the US District Court for the District of Minnesota.

The CFTC asserts that there is sole jurisdiction

Minnesota law defines a prediction market as “a system that allows buyers to invest in the future outcome of an event that is not determined or influenced by the performance of the parties involved.” Content covered by this policy includes, but is not limited to, sports, war, mass shootings, terrorist attacks, elections, court cases, death or murder, weather, and pop culture events such as awards or release dates.

Minnesota Attorney General Keith Ellison will defend the state’s laws in court. “I am deeply concerned about the loss of the prediction market to Minnesotans,” Ellison said in a statement provided to Ars. “Forecast markets are designed to make people fall in love and consume, especially young people and people with low incomes. It helps the rich get richer and the rest of us get poorer. My office and I are reviewing this matter and we will respond to the court.”