Judge Temporarily Blocks Minnesota Prediction Market Ban for Kalshi and Polymarket US
Key Takeaways
- •The injunction blocks Minnesota from enforcing its prediction market ban while litigation continues.
- •Judge Katherine Menendez said federal law likely preempts the state measure because the CFTC has exclusive jurisdiction over certain swaps.
- •The ruling provides temporary relief to Kalshi, Polymarket US, and the CFTC, but it does not finally decide the case.
- •Minnesota Attorney General Keith Ellison said the state will keep defending the law and argues prediction markets are illegal gambling.
- •The decision does not settle the wider state-federal conflict over prediction market oversight, which remains active in several other states.
A federal judge has temporarily blocked Minnesota’s prediction market ban while related lawsuits move forward. The court found that federal commodities law likely overrides the state measure. Enforcement was scheduled to begin on August 1 under the newly approved statute, making the injunction an immediate reprieve for Kalshi, Polymarket US, and the CFTC while the broader jurisdiction fight continues.
U.S. District Judge Katherine Menendez issued the injunction on July 27. Her order grants relief to Kalshi, Polymarket US, and the Commodity Futures Trading Commission. Menendez said the plaintiffs were likely to succeed after a full trial.
Why the Court Blocked the Minnesota Prediction Market Ban
The ruling centered on express preemption under the Commodity Exchange Act. That law gives the CFTC exclusive jurisdiction over swaps traded on federally registered contract markets. Menendez found that Minnesota’s prediction market ban likely reaches into that federally controlled area.
The ruling is in…. the judge granted the CFTC's request to block Minnesota's ban on prediction markets from going into effect, pending further litigation. Win for the Trump admin \u0026 CFTC, Kalshi, Polymarket, etc. A loss for the Minnesota legislature, Gov. Walz, etc. — Marshall Cohen (@MarshallCohen) July 27, 2026
The ruling is in…. the judge granted the CFTC's request to block Minnesota's ban on prediction markets from going into effect, pending further litigation. Win for the Trump admin \u0026 CFTC, Kalshi, Polymarket, etc. A loss for the Minnesota legislature, Gov. Walz, etc.
Minnesota approved the statute in 2026 to prohibit covered prediction markets. It would criminalize operators that create, run, or facilitate those products within the state. The measure covered contracts tied to sports, elections, government actions, and other events.
After the law was enacted, Kalshi, Polymarket US, and the CFTC challenged it. The defendants argued that prediction markets are swaps and therefore fall under CFTC oversight. They said Minnesota could not interfere with the CFTC’s regulatory authority over such instruments.
The court said there is a likelihood of substantial irreparable harm to the plaintiffs if the statute is enforced. Menendez added that the balance of harms supported temporary relief while litigation continues. She also said the order only maintains the status quo and does not permanently invalidate the Minnesota prediction market ban.
What Comes Next in the Minnesota Case
The judge issued only an initial opinion in the dispute. She did not decide the plaintiffs’ preemption and First Amendment claims, which will be addressed later as the case moves toward trial.
Minnesota Attorney General Keith Ellison criticized the ruling and said the state would continue defending the law. Ellison said prediction markets are illegal forms of gambling and that Minnesota has the right to protect residents from unlicensed operators.
Kalshi welcomed the decision and said states cannot prohibit products outside their jurisdiction. Polymarket also supported the ruling against the Minnesota prediction market ban. Both companies may offer their covered contracts in Minnesota while the injunction remains in effect.
The decision does not resolve the broader state-federal dispute over oversight of prediction markets. Orders prohibiting certain actions by Kalshi have been issued in Massachusetts, Michigan, Nevada, and Washington. Kalshi and Polymarket have also been denied applications to halt proceedings in Nevada and Washington.
How the Injunction Removed the August 1 Threat
A Michigan court order has temporarily restricted Kalshi’s sports contracts. Before the Minnesota ruling, the CFTC asked the court to issue a decision by August 1. The regulator said it could seek emergency appellate relief if the district court did not act.
Kalshi and Polymarket joined the CFTC’s request for a prompt ruling. The injunction removes any immediate threat created by the Minnesota prediction market ban, but the underlying legal questions remain active as the case progresses. Ellison said the state will continue defending the law as the jurisdictional dispute proceeds.