Federal Court Temporarily Blocks Minnesota’s Ban on Prediction Markets

In a recent development for the blockchain prediction market sector, a federal court has intervened to halt Minnesota’s upcoming ban on certain prediction markets. Judge Katherine Menendez of the U.S. District Court granted a preliminary injunction, which temporarily prevents the state from enforcing the law that was set to take effect on August 1.

The ruling responds to legal challenges brought by Kalshi and Polymarket US—two platforms facilitating prediction markets using blockchain technology—as well as the Commodity Futures Trading Commission (CFTC). Judge Menendez indicated that the federal Commodity Exchange Act (CEA) is likely to preempt Minnesota’s state statute, particularly as it concerns CFTC-registered contract markets.

With this injunction, Minnesota is barred from targeting or restricting CFTC-registered platforms, pending further legal proceedings. The outcome represents a key, but still preliminary, moment for prediction markets and blockchain platforms navigating state and federal regulatory frameworks. The longer-term legal status of such markets in Minnesota and other states remains open while this and similar cases proceed through the courts.