Polymarket sues Minnesota over prediction-market ban

Polymarket filed a complaint in federal court in early June 2026, becoming the third plaintiff to challenge Minnesota’s SF 3432 after the Commodity Futures Trading Commission and the exchange Kalshi. The company says the state law, set to take effect Aug. 1, would criminalize prediction-market activity and related services.

The filing argues SF 3432 conflicts with the Commodity Exchange Act by encroaching on the Commodity Futures Trading Commission’s authority to regulate event contracts traded on designated contract markets. The complaint contends the state statute would expose operators and service providers who are regulated under federal law to criminal liability.

Polymarket’s complaint follows earlier suits. The CFTC sued Minnesota in May over a prior proposal, SF 4760, and Kalshi brought a separate challenge after lawmakers enacted SF 3432. Polymarket cites recent court decisions that found federal law likely preempts certain state attempts to restrict event contracts.

The exchange places particular emphasis on free speech issues. The complaint argues the law unlawfully criminalizes advertising and marketing for prediction markets and bans the provision of data, information and verification services to market operators. The filing says those restrictions interfere with the company’s ability to communicate with customers and to obtain the information needed to operate markets that are subject to federal oversight.

“SF 3432 is the first law of its kind in the Nation, criminalizing federally regulated event-contract markets,” the complaint states.

Minnesota enacted SF 3432 in May as part of a public safety package. The statute bars operating, facilitating, servicing or advertising prediction markets on topics that include sporting events, elections, wars, legal proceedings, events involving public figures and popular culture outcomes. It extends criminal liability to firms that provide supporting services such as payment processing, geolocation, identity verification, advertising and certain data services. Violations may carry felony penalties.

Polymarket’s filing also describes event contracts as tools that can help businesses manage risk and produce real-time probability forecasts for future events. The lawsuit joins a set of legal challenges testing whether states can restrict event contracts listed on exchanges regulated by the CFTC and awaits further court rulings on federal preemption and First Amendment claims.