Federal Judge Blocks Minnesota Prediction Market Ban, Preserving Platform Operations

Woofun AI reports that a US federal judge has temporarily blocked Minnesota from enforcing its new prediction market ban against CFTC-regulated platforms Kalshi and Polymarket US.

On July 27, US District Judge Katherine Menendez granted preliminary injunctions after finding the plaintiffs likely to succeed in claims that the Commodity Exchange Act preempts the Minnesota statute. The ruling determined that several event contracts offered by the platforms qualify as swaps, thereby granting 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 while imposing criminal penalties for supporting them. Per Woofun AI, the injunction maintains the status quo until the merits of the case are resolved, though the judge noted it could be narrowed since not every event contract met the legal definition of a swap.

The order allows the platforms to continue operating in the state while litigation proceeds. This decision preserves the current operational framework for prediction markets pending a final judicial determination on federal versus state regulatory authority.