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Minnesota prediction market ban faces preliminary injunction

A federal judge said the state law likely conflicts with the federal Commodity Exchange Act and will be paused pending a final ruling.

Reported · Written up by our desk · Regulation

A federal judge has granted a preliminary injunction blocking Minnesota’s recently passed ban on prediction market operators, citing a likely conflict with the federal Commodity Exchange Act, according to CoinDesk. The ruling was issued against Kalshi, Polymarket, and the Commodity Futures Trading Commission.

Judge Katherine Menendez of the U.S. District Court for the District of Minnesota said the plaintiffs were likely to succeed in arguments that federal law preempts Minnesota’s statute and that the CFTC has jurisdiction over prediction market products that are structured as “swaps.” The judge also said the case turns on whether Minnesota’s law attempts to regulate event contracts that qualify as swaps under the CEA.

The court acknowledged that some prediction market contracts might fit within Minnesota’s statute, giving a “Love Island” winner prediction as an example, but it said it would be difficult to tailor a preliminary injunction to only those narrower issues. The judge found that not granting the halt would cause “irreparable harm” to Kalshi and Polymarket.

The preliminary injunction will remain in place until “a final decision on the merits is reached,” the ruling said.

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