Judge Blocks Minnesota Prediction Market Ban, Citing Federal Law

A federal judge has temporarily blocked Minnesota's impending ban on prediction markets, ruling that the state law likely conflicts with federal oversight. U.S. District Court Judge Katherine Menendez granted a preliminary injunction against the law, which was set to take effect August 1. The Commodity Futures Trading Commission (CFTC), along with prediction market platforms Kalshi and Polymarket, had sued Minnesota, arguing that the state's ban is preempted by the federal Commodity Exchange Act. The judge found that the plaintiffs are likely to succeed in their argument that the CEA, which governs U.S. commodities exchanges, supersedes the state law. The ruling noted that some contracts on prediction markets, such as those predicting outcomes of reality television shows, might fall under the Minnesota law, but a narrowly tailored injunction would be difficult. The judge also stated that denying a halt to the law would cause irreparable harm to Kalshi and Polymarket. The preliminary injunction will remain in effect until a final decision on the merits of the case is reached. In a related matter, proposed rules from the Trump administration regarding prediction markets have faced significant opposition, with critics arguing the CFTC is exceeding its authority.