Kalshi, a prediction market platform, has filed a federal lawsuit against Minnesota to block a new law that would criminalize the operation and advertising of prediction markets in the state. The law, SF4760, signed by Governor Tim Walz on May 18, is set to take effect on August 1, 2026, making Minnesota the first U.S. state to impose such a felony ban. Kalshi argues that the law infringes on federal jurisdiction, as prediction markets are regulated by the Commodity Futures Trading Commission (CFTC) as derivatives, not gambling products. The CFTC has also filed a lawsuit against Minnesota, seeking a preliminary injunction to prevent the law from being enforced. The agency contends that Congress has granted it exclusive oversight of event contracts, and state laws cannot override this federal authority. The outcome of these legal battles could set a precedent for how prediction markets are regulated across the United States, as more than a dozen states have taken action against Kalshi and similar platforms.