Judge blocks Minnesota's first-in-the-nation law banning prediction markets just days before it was set to take effect

A federal judge has temporarily blocked Minnesota's first-in-the-nation law banning prediction markets, just days before it was set to take effect. U.S. District Judge Katherine Menendez ruled that the U.S. Commodity Futures Trading Commission (CFTC), along with companies Kalshi and Polymarket, were likely to succeed in their legal challenge against the law.³⁴⁸

Menendez's ruling emphasized that allowing the law to take effect would cause 'irreparable harm' to the operators. The law, which was to criminalize the creation and operation of prediction markets, had garnered bipartisan support and was scheduled to take effect on August 1.

Minnesota Attorney General Keith Ellison described prediction markets as 'gambling, plain and simple,' and expressed disappointment over the ruling, stating that it allows 'predatory gambling apps to proliferate.'⁹

Neal Kumar, Polymarket's chief legal officer, stated that the decision reinforces that prediction markets on commission-registered exchanges are governed by federal law, not state regulations. The CFTC has asserted its exclusive jurisdiction over such transactions, a stance supported by the Trump administration, which has been critical of state-level regulations.

The American Gaming Association estimates that states have lost over $1.2 billion in tax revenue due to the rise of prediction markets, highlighting the financial stakes involved in this legal battle.

As the litigation continues, Rep. Emma Greenman expressed hope that this is just the beginning of the fight over Minnesota's law.