Kalshi and Polymarket Win Court Pause Against Minnesota’s Prediction Market Ban

Minnesota’s ban on prediction market platforms was supposed to take effect August 1. A federal judge just made sure that won’t happen on schedule, siding with Kalshi and Polymarket days before the deadline.

How This Fight Started

Minnesota passed a law earlier this year criminalizing the operation of prediction market platforms within the state. Kalshi, Polymarket, and the Commodity Futures Trading Commission responded with a lawsuit, arguing the state law was preempted by the federal Commodity Exchange Act, since prediction market contracts are structured as swaps that fall under the CFTC’s exclusive federal jurisdiction, not a state’s.

What the Judge Actually Ruled

Judge Katherine Menendez of the U.S. District Court for the District of Minnesota granted a preliminary injunction, finding that the plaintiffs are likely to succeed on their argument that federal law preempts Minnesota’s statute, at least as applied to many of the contracts currently listed on Kalshi’s and Polymarket’s platforms. That finding is enough to pause enforcement while the underlying case continues.

What Happens Now

Practically, this means Kalshi and Polymarket can keep operating in Minnesota past the August 1 deadline while the legal battle plays out in full. It does not end the case; a preliminary injunction is a temporary measure based on the judge’s assessment of who is likely to win, not a final ruling. But it is a significant early signal, and it adds Minnesota to a growing list of states where prediction market operators have successfully argued that federal commodities law overrides state-level attempts to ban or restrict them.

That pattern is likely to matter well beyond Minnesota, as more states weigh their own prediction market restrictions with this legal precedent now on the board.

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