Katherine Menendez blocks Minnesota's first prediction market ban while the administration defends federal jurisdiction.
U.S. District Judge Katherine Menendez issued a preliminary injunction on Monday, temporarily blocking Minnesota’s first-in-the-nation law that bans prediction markets. The ruling prevents the law from taking effect on Saturday, as the court found that the federal Commodity Futures Trading Commission, Kalshi, and Polymarket were likely to succeed in their challenge. The administration announced that the federal government holds exclusive jurisdiction over these markets, arguing that states cannot ban platforms that are already federally regulated. While Minnesota officials characterize prediction markets as a form of gambling, the federal government and market operators argue they are distinct from traditional commodities. The administration and the companies argue that a patchwork of state rules would disrupt a nationally uniform market. Meanwhile, Governor Tim Walz signed an executive order prohibiting state employees from using inside information to bet on these platforms, reinforcing ethical standards despite the court's temporary victory for the federal government.