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Katherine Menendez blocks Minnesota's prediction market ban via preliminary injunction

A federal court ruling has halted Minnesota's attempt to become the first state to ban prediction markets, just days before the law was scheduled to take effect. U.S. District Judge Katherine Menendez issued a preliminary injunction blocking the state's total ban, ruling that the Commodity Futures Trading Commission (CFTC) holds exclusive jurisdiction over many prediction market trades that qualify as "swaps" under federal law. The administration announced the ban was likely to be preempted by the Commodity Exchange Act. While Minnesota lawmakers viewed the markets as gambling, the CFTC and platforms like Kalshi and Polymarket argued that federal oversight is necessary to avoid a patchwork of state rules. Judge Menendez noted that while the state may still be allowed to prohibit specific types of event contracts that do not meet the federal definition of swaps, the total ban is currently stayed. Minnesota Attorney General Keith Ellison defended the law, describing the markets as "gambling, plain and simple," and committed to continuing the litigation to protect the state from predatory gambling apps.

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