Federal Judge Halts Minnesota Law Banning Prediction Markets
A U.S. district judge issued a preliminary injunction stopping a Minnesota statute that would have made operating most prediction markets a felony, pending further litigation.
A federal judge on Monday blocked a Minnesota law that would have criminalized most prediction markets from operating and advertising in the state. The injunction was granted just days before the measure was scheduled to take effect on Saturday.
The law, passed in May, was the first state legislation to make such activities a felony. The Commodity Futures Trading Commission and two prediction-market operators, Kalshi and Polymarket, sued, arguing that regulation of these platforms falls under federal jurisdiction.
Judge Kate M. Menendez of the U.S. District Court for the District of Minnesota found that the companies could suffer irreparable harm without the injunction and ordered the law to remain on hold until a final decision is reached.
"The plaintiffs have demonstrated a substantial likelihood of success on the merits and face the risk of irreparable injury," Menendez wrote in her ruling.
Kalshi and Polymarket allow users to wager on outcomes ranging from sports events to reality-TV shows. Their rapid growth has drawn attention from regulators concerned about potential insider-information misuse and gambling-related risks.