Free Markets

Federal Judge Halts Minnesota's Prediction Market Ban, Signaling Other States' Efforts Might Be Illegal Too

A preliminary injunction will keep Kalshi and Polymarket active in the state after a district judge found federal law preempts the state's ban.

Tosin Akintola | 7.28.2026 3:04 PM

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In May, Minnesota became the first state in the country to outlaw prediction markets such as Kalshi and Polymarket. Minnesota state Rep. Emma Greenman (D–Minneapolis) told NPR at the time that the state should "decide how best and what regulations" it would subject prediction markets to.

On Monday, a federal court disagreed, issuing a preliminary injunction barring Minnesota from enforcing the ban.

The decision, handed down by U.S. District Judge Katherine Menendez, found that the Commodity Futures Trading Commission (CFTC)—the federal body that regulates prediction markets—and prediction platforms were "likely to succeed" on claims that they "face a threat of irreparable harm." She also ruled that federal law expressly preempts Minnesota's ban, and that the "balance of harms and the public interest" necessitated an injunction.

Menendez's decision comes less than a week after the CFTC, Kalshi, and........

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