Federal judge blocks Minnesota's first-in-the-nation prediction market ban
A federal judge issued a preliminary injunction on Monday, July 27, 2026, blocking Minnesota from enforcing its first-in-the-nation law banning prediction markets. The state had sought to bar residents from trading on event-contract platforms beginning August 1. The court ruled in favor of Kalshi, Polymarket US, and the Commodity Futures Trading Commission, which had challenged the state-level prohibition. The ruling preserves platform access for Minnesota traders while litigation proceeds.
This ruling gives Kalshi and Polymarket a federal precedent they lacked in New York, Wisconsin, and Washington. The judge found that not every event contract qualifies as a swap under federal law, which limits but does not kill Minnesota's narrower options. For traders, the split between federal wins and state losses means contract validity now depends on geography.
The platforms must still geofence state by state while pressing the Second Circuit for a single national standard. Each additional state filing multiplies legal spend and operational complexity. The Minnesota decision is one data point in a map of conflicting orders that traders and operators must navigate until a higher court settles the preemption question. The gap between federal registration and state enforcement is widening, not closing.