Minnesota prediction market ban blocked by federal judge

A federal judge in Minnesota has issued a preliminary injunction pausing the state's upcoming ban on prediction markets. The law, which was scheduled to take effect this week, faced immediate legal pressure from the Justice Department and the Commodity Futures Trading Commission alongside private companies including Kalshi and Polymarket.

U.S. District Judge Katherine Menendez ruled that the plaintiffs demonstrated a strong likelihood of success in their argument that federal law overrides state authority in this matter. The court found that federal regulations provide the CFTC with exclusive oversight regarding event contracts traded on registered exchanges, making the state-level attempt to prohibit these operations problematic.

While the judge noted that the state statute might remain enforceable in certain limited applications, the current order halts enforcement against designated contract markets. This decision preserves the current status of these platforms while the legal proceedings continue. The ruling provides a temporary victory for market operators who argued that the state law caused irreparable harm by disrupting established, nationally uniform markets.

Minnesota officials initially embedded this ban within a larger public safety bill, arguing that these markets function as gambling and present health and safety concerns. This legal conflict follows similar legislative pushes in states such as Nevada, Utah, and Arizona, where authorities have attempted to restrict or outright prohibit various forms of proposition betting and prediction markets.