Federal Judge Grants Kalshi, Polymarket Pause on Minnesota Prediction Market Ban

A federal judge has issued a preliminary injunction blocking Minnesota’s law banning prediction market operators, siding with Kalshi, Polymarket, and the Commodity Futures Trading Commission in their legal challenge.

Ruling Details

Judge Katherine Menendez of the U.S. District Court for the District of Minnesota found that the state law likely conflicts with the federal Commodity Exchange Act, which grants the CFTC jurisdiction over “swaps,” a category prediction market contracts fall under. The judge said the companies and the federal regulator are likely to succeed at trial in proving the state law is preempted by federal authority.

Background of the Case

Kalshi, Polymarket, and the CFTC filed suit against Minnesota earlier this year after the state passed legislation criminalizing prediction market operations. The judge acknowledged that some contracts, such as those tied to entertainment outcomes, could potentially fall within the state’s authority, but said crafting a narrow injunction limited to those cases would be impractical.

The judge noted that allowing the law to take effect would cause lasting harm to the platforms. The injunction will remain in place until a final ruling is reached in the case.