Federal judge blocks Minnesota prediction market ban

Minnesota prediction markets Kalshi Polymarket CFTC

U.S. District Judge Katherine Menendez issued a preliminary injunction that halts enforcement of Minnesota’s new law criminalizing prediction markets. The law, signed by Governor Tim Walz in May and set to take effect on Aug. 1, would have made it a felony to create, operate, facilitate or advertise such markets. Menendez found that the Commodity Futures Trading Commission (CFTC), together with the platforms Kalshi and Polymarket, are likely to succeed on preemption claims because the targeted contracts qualify as “swaps” under the Commodity Exchange Act, over which the CFTC has exclusive jurisdiction. The injunction bars the state from enforcing the ban against entities registered as designated contract markets with the CFTC, keeping Kalshi and Polymarket operating in Minnesota while the case proceeds. Minnesota Attorney General Keith Ellison called prediction markets “gambling, plain and simple” and said the state will continue to defend the statute. The CFTC has also asked the court to expedite its request for relief and warned it would seek emergency appellate relief if the injunction were not issued promptly. The ruling underscores a legal clash between state gambling regulations and federal derivatives law and may influence similar actions in other states.

Entities: Commodity Futures Trading Commission · Kalshi · Katherine Menendez · Michael S. Selig · Minnesota · Polymarket

Claims

What the coverage asserts, and how well corroborated each claim is across sources.

[● 15 SOURCES] The CFTC, along with Kalshi and Polymarket, sued Minnesota arguing the state law is preempted by federal law that gives the CFTC exclusive authority over event contracts. (The CFTC filed a lawsuit challenging the Minnesota ban; Kalshi and Polymarket joined as co‑plaintiffs.)
[○ 1 SOURCE] The CFTC requested the court expedite its ruling and warned it would seek emergency appellate relief if the injunction is not granted by July 28. (The CFTC filed a motion asking for expedited relief and signalling it would pursue emergency appellate relief if the pre)
[● 10 SOURCES] Minnesota Governor Tim Walz signed the prediction‑market ban into law in May, making it a criminal offense to create, operate, facilitate, or advertise such markets in the state. (Governor Tim Walz signed the legislation that would have criminalized prediction‑market activity.)
[● 13 SOURCES] U.S. District Judge Katherine Menendez granted a preliminary injunction halting Minnesota's prediction‑market ban before it took effect on Aug. 1. (Judge Menendez issued a preliminary injunction blocking enforcement of the Minnesota law.)
[● 13 SOURCES] Judge Menendez said many prediction‑market contracts qualify as “swaps” under the Commodity Exchange Act, giving the CFTC exclusive jurisdiction. (The judge’s order identified event‑contract trades with clear economic consequences as swaps subject to CFTC authority.)
[● 13 SOURCES] The injunction is limited to entities registered as designated contract markets; it does not permanently invalidate the Minnesota statute. (Judge Menendez clarified the order’s scope, stating it only enjoins enforcement against CFTC‑registered markets.)
[● 13 SOURCES] Kalshi and Polymarket are designated contract markets registered with the CFTC. (Both platforms are listed as DCMs under CFTC regulation.)