Federal judge blocks Minnesota’s prediction market ban days before it takes effect - NBC News

What the report says

NBC News reported that a federal judge on Monday temporarily blocked Minnesota’s new ban on prediction markets, just days before the measure was scheduled to take effect on Saturday. U.S. District Judge Katherine Menendez issued a preliminary injunction after lawsuits were filed by the Justice Department, the Commodity Futures Trading Commission, and prediction-market operators Kalshi and Polymarket US.

The order prevents Minnesota from enforcing the law against entities registered with the CFTC as designated contract markets. According to NBC News, Menendez found that the challengers had shown they were likely to succeed on at least part of their argument that federal law overrides the state ban, and that they could suffer harm that could not easily be repaired if enforcement began. She also noted that the state law may not be displaced in every possible use, but said a pause would preserve the current situation while the legal questions are developed further.

The dispute centers on whether event contracts offered by federally registered exchanges fall under the CFTC’s exclusive authority or can be restricted by states as gambling-related activity. Minnesota included the ban in a broader public safety bill and described prediction markets as a gambling and public health concern. State Rep. Emily Greenman told NBC News that gambling has long been treated by states as a public health and safety matter.

NBC News also noted similar fights elsewhere. Arizona brought criminal charges against Kalshi over transactions resembling sports betting, but a federal judge blocked that prosecution on pre-emption grounds. Nevada has extended a temporary state-court ban involving Kalshi, and Utah recently prohibited proposition betting in a way that applies to prediction markets.