Minnesota’s Prediction Market Ban Hits Legal Roadblock After Federal Court Ruling

Kalshi and Polymarket can keep serving Minnesota users after a judge found federal law likely preempts the state's prediction market ban. A federal judge has temporarily blocked Minnesota from enforcing a first-of-its-kind law that would have prohibited prediction markets in the state. The latest decision hands a temporary legal victory to Kalshi, Polymarket, and the US Commodity Futures Trading Commission (CFTC). Early Court Victory According to Reuters, US District Judge Katherine Menendez granted a preliminary injunction after finding that the state law, which was due to take effect on Saturday, is likely preempted by the federal Commodity Exchange Act. The ruling allows Kalshi and Polymarket to continue offering event contracts to users in Minnesota while the lawsuit proceeds. The dispute began after Governor Tim Walz signed legislation in May that made it a criminal offense to operate, host, or promote prediction markets in the state. Unlike other states that have challenged companies such as Kalshi by arguing they were operating unlicensed gambling businesses under existing gaming laws, Minnesota enacted a law that aimed specifically at prediction markets. Judge Menendez said...