U.S. District Judge Katherine Menendez blocks Minnesota's prediction market ban to maintain the status quo.
U.S. District Judge Katherine Menendez granted a preliminary injunction on Monday, temporarily blocking a Minnesota law that would have banned prediction markets from operating in the state starting August 1. The ruling follows lawsuits filed by the Commodity Futures Trading Commission (CFTC), Kalshi, and Polymarket, which argued that federal law pre-empts the state's authority to regulate these markets. Judge Menendez ruled that the plaintiffs met their burden to show they are likely to succeed in proving that federal law provides the CFTC exclusive authority over federally registered contract markets. The ban was originally embedded in a public safety bill, with Minnesota officials characterizing prediction markets as a form of predatory gambling. While the state maintains that it has the right to regulate gambling to protect communities, the court's decision maintains the current market operations for now. The CFTC and the plaintiffs argued that the ban would cause irreparable harm to companies like Polymarket and Kalshi, which seek a national uniform market and First Amendment rights to advertise.