Federal judge blocks Minnesota's felony prediction-market ban
A federal judge issued a preliminary injunction blocking Minnesota from enforcing a new law that would have banned prediction markets in the state. The ruling came in lawsuits brought by Kalshi, Polymarket, the Commodity Futures Trading Commission, and the Justice Department. The decision prevents the felony ban from taking effect while legal challenges proceed. Published reports did not include the judge's full reasoning or the precise scope of the injunction.
The injunction gives Kalshi and Polymarket a federal precedent against outright state prohibition, which they lacked while fighting Michigan and Washington judges who rejected preemption. The Minnesota ruling shifts burden onto states to justify extreme measures rather than forcing platforms to prove federal supremacy case by case. For traders, it reduces the risk that a single state legislature can void positions mid-contract.
The platforms can now cite a federal court that blocked a criminal ban, not merely a licensing rule. That matters immediately in Washington, where Kalshi faces a state-court injunction, and in Wisconsin, where parallel actions loom. Other federal judges may follow this skepticism toward blanket bans, or they may carve their own paths.
Reverses the CFTC's earlier loss in Minnesota, where the agency had sued to block the nation's first felony prediction-market ban just days before.