Minnesota and California AGs Square Off With CFTC Over Who Controls Prediction Markets in America

The fight over who gets to police prediction markets escalated when two of the country’s largest states put their attorneys general publicly on the record against the Commodity Futures Trading Commission. Minnesota’s Keith Ellison and California’s Rob Bonta delivered pointed arguments that the federal commodities regulator not only lacks authority over sports prediction contracts — it lacks the capacity to handle the social consequences of regulating a gambling product at scale.

“We have a whole regime around it, and the CFTC doesn’t,” Ellison told Bloomberg, referring to Minnesota’s existing infrastructure for managing gambling addiction, consumer protection, and operator oversight. Bonta framed the dispute as a classic states’ rights issue, calling the CFTC’s interpretation of sports-related prediction contracts a case of forcing a square peg into a round hole. Both attorneys general indicated the conflict could ultimately reach the Supreme Court if federal circuit courts reach contradictory conclusions.

A Coalition Fighting Federal Overreach

The public statements from Ellison and Bonta amplify a position already shared by 41 bipartisan state attorneys general who filed formal comments with the CFTC in late April. Their argument is consistent across all 41 signatories: prediction markets that allow users to bet on the outcome of sporting events are functionally indistinguishable from sportsbooks, and regulating gambling has always been a state power — not a federal one.

The CFTC disagrees. The agency has argued it holds exclusive jurisdiction over federally designated contract markets under the Commodity Exchange Act, and it has backed up that position with lawsuits. After Minnesota passed a law in May 2026 that would have made it a crime to operate a prediction market in the state as of August 1, the CFTC filed suit in federal court arguing that the Minnesota law conflicted with federal authority. That filing was the agency’s sixth lawsuit against a state in seven weeks.

Stakes for Sports Bettors

For sports bettors and DFS players, the resolution of this dispute will shape what prediction markets look like in 2027 and beyond. If the CFTC prevails, platforms like Kalshi and Polymarket can operate nationally under federal oversight. If the states win, each state will have the authority to ban, tax, or regulate prediction markets under its own gambling framework — creating a patchwork environment that could limit availability significantly in certain markets.

Prediction markets have grown explosively in recent months. The week ending June 15 produced $12.2 billion in weekly trading volume and $1.48 billion in open interest — both records — driven in large part by World Cup sports contracts. That growth has made the regulatory question more urgent than it has ever been. For bettors navigating the current landscape, sportsbook promotions from licensed operators remain the most straightforward legal option in most states, while prediction market access depends significantly on where you live.

The legal battle is far from over. More than 20 lawsuits against prediction market platforms are pending across the country, and the CFTC is simultaneously running a rulemaking process that could shape the formal definition of what prediction markets are allowed to offer. Players who want to understand the current state of their access to these platforms should review the latest information through a state-by-state sports betting guide.