Federal judge blocks Minnesota prediction market ban, citing federal preemption under Commodity Exchange Act

Published Jul 28, 07:04 PM UTC

On July 28, 2026, U.S. District Judge Katherine Menendez issued a preliminary injunction barring Minnesota from enforcing its ban on prediction markets like Kalshi and Polymarket. The ruling found that the Commodity Futures Trading Commission (CFTC) and prediction platforms are likely to succeed on claims of irreparable harm, and that federal law preempts Minnesota's ban under the Commodity Exchange Act. The decision comes after Minnesota became the first state to outlaw such markets in May 2026. Judge Menendez noted that most prediction market contracts qualify as federally regulated swaps, though she left room for states to ban contracts without financial or economic consequences, such as bets on reality TV shows. The CFTC is also pursuing similar legal actions against Arizona, Connecticut, Illinois, New Jersey, Massachusetts, and Wisconsin, arguing exclusive federal jurisdiction over these platforms.