Minnesota Prediction Market Ban Blocked By Federal Judge

A federal judge has stepped in to temporarily block Minnesota from enforcing a new law that would have banned prediction markets across the state. US District Judge Katherine Menendez granted a preliminary injunction, giving a major early win to platforms like Kalshi and Polymarket, alongside the US Commodity Futures Trading Commission. The state law was originally scheduled to take effect on Saturday, but the ruling allows both platforms to keep offering event contracts to users in Minnesota while the legal battle continues.

Governor Tim Walz signed the legislation in May, making it a criminal offense to operate or promote prediction markets in the state. However, Judge Menendez found that many event contracts on Kalshi and Polymarket likely qualify as swaps under federal law. Because the Commodity Futures Trading Commission regulates swaps, federal rules are likely to override the state ban. Representatives for Kalshi welcomed the decision, while Minnesota Attorney General Keith Ellison stated that the state disagrees with the ruling and will keep defending the law.

This legal clash highlights the growing friction between state authorities and federal oversight regarding prediction platforms. While Kalshi and Polymarket celebrate this temporary relief, both platforms still face restrictions in several other states. Traders should watch for the final court decision, as the outcome will set a major precedent for how prediction markets operate across the United States.