MINNEAPOLIMEDIA NEWS | Federal Judge Pauses Minnesota’s First-in-the-Nation Prediction-Market Ban

ST. PAUL, MN (August 2, 2026). A federal judge has prevented Minnesota from enforcing a first-in-the-nation law that would have criminalized operating or advertising certain prediction markets beginning August 1.

U.S. District Judge Katherine Menendez granted a preliminary injunction sought by the Commodity Futures Trading Commission and prediction-market operators Kalshi and Polymarket.

The injunction does not permanently invalidate the Minnesota law. It temporarily preserves access to the platforms while the federal lawsuits proceed and the court considers the competing state and federal regulatory claims.

Prediction markets allow participants to purchase contracts based on whether particular events will happen. Markets may involve elections, economic indicators, weather, sporting events or other measurable outcomes.

Minnesota lawmakers classified the activity as gambling and approved legislation prohibiting companies from operating or advertising prediction markets in the state. Violations could carry criminal penalties.

The Commodity Futures Trading Commission and the affected companies contend that federally regulated event contracts fall under the federal agency’s exclusive authority. Their lawsuits argue that Minnesota cannot override the national regulatory framework governing those contracts.

Minnesota Attorney General Keith Ellison’s office maintains that prediction markets are gambling and that the state has authority to protect residents from what it considers predatory gambling products.

In a statement following the preliminary injunction, the attorney general’s office said Minnesota respectfully disagreed with the court’s decision to maintain a status quo allowing the applications to continue operating.

The office acknowledged that the litigation presents complex legal questions and said the state would continue defending the law.

The immediate result is that Minnesotans will not face enforcement under the disputed prohibition while the injunction remains in place.

The order also means Minnesota will not immediately become the first state to enforce a comprehensive criminal ban against the operation and advertising of prediction-market platforms.

The broader case could help determine how far states may go in regulating event-contract markets that are overseen at the federal level.

Separately, Minnesota state employees remain prohibited from using confidential government information to place prediction-market trades.

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