CFTC sues after Minnesota bans prediction markets

Minnesota Gov. Tim Walz signed SF 4760, an omnibus public safety bill that makes it a felony to create, operate or intentionally facilitate a prediction market “for consideration and as part of a business.” The law bars wagers on sports, elections, government action, weather, wars, assassinations and popular culture. The Commodity Futures Trading Commission filed a federal lawsuit hours after the governor signed the bill, arguing the state law intrudes on the agency’s exclusive jurisdiction over federally regulated derivatives and would criminalize longstanding event contracts tied to weather and agriculture.

Louisiana Gov. Jeff Landry signed two sweepstakes-related bills, HB 53 and HB 883. HB 53 adds offenses including “gambling by electronic sweepstakes device” as predicate acts under the state’s racketeering statute; that provision takes effect Aug. 1, 2026. HB 883 expands the state’s “gambling by computer” statute to cover online and mobile games that simulate gambling and use dual-currency payment systems where virtual currency can be exchanged for cash or prizes.

Iowa Gov. Kim Reynolds signed SF 2289, which broadens the Iowa Racing and Gaming Commission’s authority to pursue unlicensed gambling operations and explicitly names “illegal sweepstakes.” The law clarifies regulators’ power to issue cease-and-desist orders and seek court relief against platforms the state considers unlicensed gambling operators. The measure does not impose a direct dual-currency ban.

Tennessee’s legislature transmitted two related bills to the governor. SB 2136 would prohibit “online sweepstakes games” defined as online games that use a virtual-currency system, simulate gambling and allow players to redeem currency for cash or prizes. SB 1992 would create a Class E felony for anyone who influences an event’s outcome while holding a financial interest in a related prediction market contract. Gov. Bill Lee faces a deadline to sign or veto those measures.

At the federal level, Rep. Ritchie Torres introduced the Campaign Funds Integrity Act of 2026, which would bar candidates and political committees from using campaign funds to participate in prediction markets or enter event contracts. Sens. Katie Britt and Richard Blumenthal introduced the GAME Act, which would prohibit online platforms from targeting minors with sports betting advertisements; their announcement referenced prediction markets alongside sportsbooks.

Connecticut Gov. Ned Lamont signed HB 5229, expanding responsible-gaming and advertising rules for licensed operators, banning gambling advertising in college athletic facilities and on university-operated digital platforms unless directed at a general audience, strengthening protections for self-excluded players and ordering a state study of prediction markets to examine impacts on underage users, problem gambling, state revenue and licensed sportsbooks.

The CFTC’s complaint contends the Minnesota law reaches products the agency regulates at the federal level and seeks relief in federal court. Legal and enforcement outcomes are now pending as state laws take effect or await gubernatorial action.