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Judge blocks Minnesota prediction market ban for Kalshi and Polymarket US
Minnesota’s ban was set to take effect Aug. 1 and carries criminal penalties, but a preliminary injunction lets the CFTC-regulated platforms keep operating while the case moves forward.
A US federal judge temporarily blocked Minnesota from enforcing a new prediction market ban against CFTC-regulated platforms Kalshi and Polymarket US, according to Cointelegraph.
In a July 27 court order granting preliminary injunctions, US District Judge Katherine Menendez said the plaintiffs were likely to succeed, at least in part, on claims that the Commodity Exchange Act preempts the state law.
The judge found that several event contracts offered by the platforms appear to qualify as swaps, which she said gives the CFTC exclusive jurisdiction over transactions involving those contracts on designated contract markets.
Minnesota’s law, scheduled to take effect Aug. 1, would prohibit the creation, operation and advertising of prediction markets and impose criminal penalties for supporting them. The order keeps the status quo in place while litigation proceeds, though the court cautioned the injunction could be narrowed because the plaintiffs had not shown that every event contract met the legal definition of a swap.