Polymarket Sues Minnesota, Joining Kalshi in Fight Against Prediction Market Ban

Polymarket has become the newest challenger to Minnesota’s sweeping ban on prediction markets, taking the state to federal court in an effort to block the law before it fully takes effect.

The company filed its lawsuit in the U.S. District Court for the District of Minnesota, arguing that the state’s new restrictions on event‑contract trading violate federal law and unlawfully restrict protected speech.

In its complaint, which names Gov. Tim Walz and Attorney General Keith Ellison as defendants, Polymarket claims the legislation is preempted by federal authority and infringes on the First Amendment.

The filing arrives as Minnesota faces a growing wave of legal pressure. Polymarket’s case follows two earlier lawsuits, one brought by the Commodity Futures Trading Commission and another by Kalshi, each challenging the same law from different angles.

“The threat to Polymarket US is immediate”

Polymarket argues that Minnesota’s new law puts the company in danger the moment it takes effect. The ban, created under SF 3432, is the first state law in the country to directly outlaw prediction markets like Polymarket and Kalshi.

Once August arrives, running or even managing such a platform becomes a felony, and the company says the state is trying to force it out despite federal oversight already being in place.

In its complaint, Polymarket warns that “the threat to Polymarket US is immediate,” stressing that the platform will soon face a real risk of prosecution. The filing says the company must either shut down lawful activity or expose itself to felony charges.

Polymarket argues that Congress gave the Commodity Futures Trading Commission “exclusive jurisdiction” over financial event contracts traded on federally regulated exchanges, and that Minnesota has stepped far outside its authority by creating its own criminal ban.

The company also says even the start of an enforcement action would cause serious damage. As Polymarket puts it, “Even a meritless state enforcement action would immediately disrupt Polymarket US’s federally authorized operations, fragment a national market, reduce liquidity, jeopardize critical banking and commercial relationships, undermine user trust and harm Minnesota residents.”

Beyond the federal preemption issue, Polymarket claims the law also violates its First

Amendment rights. The company says Minnesota is blocking its ability to “broadcast” information about its services, including real‑time contract prices that reflect public forecasting data.

According to the complaint, these prices are part of the platform’s speech, and banning them cuts off Minnesotans from information the market produces.

Nationwide prediction market battle continues

Minnesota was not the first to attack prediction markets, but its explicit law is new in the country. Other states have taken narrower approaches, but none have gone as far as creating a felony‑level prohibition on every type of event‑contract platform. Nevada and Massachusetts both secured injunctions against Kalshi, though the Massachusetts order is paused while the appeal plays out.

At the same time, the federal government has been pushing back as well. Washington has sued five states that attempted to regulate or shut down prediction markets under state law, arguing that these platforms fall under federal oversight.

Operators like Kalshi and Polymarket have also filed their own lawsuits, creating a patchwork of cases across the country.

Kalshi’s case against Minnesota has already been merged with the federal government’s lawsuit, and both sides are preparing for a preliminary injunction hearing on July 1. With Polymarket now entering the fight, its case is expected to be folded into the same proceeding according to CourtHouseNews.

Polymarket Sues Minnesota, Joining Kalshi in Fight Against Prediction Market Ban

“The threat to Polymarket US is immediate”

Nationwide prediction market battle continues

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