Judge blocks Minnesota prediction market ban

On July 27, 2026, U.S. District Judge Nadine Menendez granted a preliminary injunction blocking United States — Minnesota's first-in-the-nation law that would have made operating or advertising prediction markets a felony punishable by up to five years in prison and a $10,000 fine. The law, signed by Governor Tim Walz on May 18, was set to take effect August 1. The United States — United States Commodity Futures Trading Commission (CFTC), along with Kalshi and Polymarket, sued arguing that the Commodity Exchange Act preempts the state law because the CFTC has exclusive jurisdiction over event contracts traded on designated contract markets. The judge found the plaintiffs likely to succeed on their preemption claim and that they would suffer irreparable harm without the injunction. The order temporarily bars enforcement of the law against CFTC-registered entities while litigation proceeds. United States — Minnesota Attorney General Keith Ellison vowed to continue defending the law. The ruling is a significant legal victory for prediction markets, which have faced pushback from multiple states. Other states like United States — Arizona, United States — Nevada, and United States — Utah have also taken action against Kalshi. The CFTC chairman Michael S. Selig praised the court's careful consideration. Kalshi reported over 90,000 users in United States — Minnesota spending millions monthly. The case highlights ongoing tension between state gambling laws and federal regulatory authority over financial derivatives.