- A federal judge temporarily blocked Minnesota from enforcing its new law against Kalshi and Polymarket US.
- The court said the plaintiffs were likely to succeed in part on federal preemption claims.
- The injunction keeps both platforms operating in Minnesota while the case continues.
A US federal judge has paused enforcement of the Minnesota prediction ban against Kalshi and Polymarket US, allowing both platforms to keep operating in the state for now. The dispute centers on whether Minnesota can enforce a new restriction on prediction markets when some of the contracts involved may fall under federal commodities law. In a Monday order, US District Judge Katherine Menendez granted preliminary injunctions after finding the plaintiffs were likely to succeed at least in part on their claim that the Commodity Exchange Act overrides the state statute. The ruling does not end the case, but it preserves current operations while the broader legal fight proceeds.
Court order pauses state enforcement
The court order temporarily stops Minnesota from enforcing its new law against Kalshi and Polymarket US. The law was set to take effect Saturday and would prohibit the creation, operation and advertising of prediction markets in the state. It also carries criminal penalties for supporting those markets and related promotional activity.
By granting preliminary injunctions, Judge Katherine Menendez allowed both platforms to continue operating in Minnesota while the litigation moves forward. The order said temporary relief was appropriate to maintain the status quo until the court can fully address the merits of the challenge and determine how the disputed contracts should be treated under federal law.
Why the Minnesota prediction ban faces a legal challenge
According to the order, the plaintiffs were likely to succeed at least in part on claims that the Commodity Exchange Act preempts the Minnesota statute. That finding was a key reason the court decided to block enforcement of the Minnesota prediction ban for now while the parties continue presenting their arguments.
The judge also said several event contracts offered by the platforms appeared to qualify as swaps. If those contracts are legally swaps, then the Commodity Futures Trading Commission would have exclusive jurisdiction over transactions involving them on designated contract markets, limiting the state’s authority to regulate the same activity.
Federal oversight shapes the Minnesota prediction ban case
The ruling specifically concerns CFTC-regulated platforms Kalshi and Polymarket US. The judge’s analysis focused on whether federal oversight of certain event contracts limits Minnesota’s ability to apply its new state law to those platforms when their products are offered through federally regulated markets and may fall within the CFTC’s exclusive jurisdiction.
At the same time, the court did not fully adopt every argument made by the plaintiffs. The order noted that they had not shown that every event contract listed by Kalshi and Polymarket US meets the legal definition of a swap, leaving room for a narrower ruling later as the factual and legal record develops.
Current limits on the Minnesota prediction ban ruling
The injunction is temporary and does not settle the underlying dispute. Judge Menendez cautioned that the relief could eventually be narrowed if later proceedings show that some listed contracts do not fit the legal classification that supported the initial injunction or fall outside the scope of exclusive federal oversight.
That means the Minnesota prediction ban is blocked only for now, not permanently. The court has so far concluded that temporary relief is justified while the legal issues are examined more closely, the parties develop the record and the broader challenge is resolved through later proceedings.
Conclusion
The current ruling leaves the Minnesota prediction ban unenforced against Kalshi and Polymarket US as the federal case continues. Judge Katherine Menendez found that the plaintiffs were likely to succeed at least in part on claims that federal commodities law preempts the state statute, and she pointed to the CFTC’s exclusive authority over certain contracts that appear to qualify as swaps. Still, the court also made clear that this relief may not remain as broad if later review shows some contracts do not meet that standard. For now, the decision keeps both platforms operating in Minnesota while the legal questions are worked through.
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