Minnesota’s first-in-the-nation law banning prediction markets is halted in federal court - AP News

What the report says

The Associated Press reports that a federal judge in Minnesota has temporarily blocked the state’s first-in-the-nation ban on prediction markets, days before the law was scheduled to take effect Saturday. U.S. District Judge Katherine Menendez found that the U.S. Commodity Futures Trading Commission, Kalshi and Polymarket were likely to succeed in their challenge and that allowing the statute to start would cause irreparable harm to the companies.

The Minnesota law would have criminalized creating or operating prediction markets, as well as assisting with many related activities. Kalshi, Polymarket and the CFTC are seeking to have it permanently barred, arguing that federal law gives the commission exclusive authority over the event-contract transactions offered on federally registered exchanges. The order keeps the law on hold while the lawsuit continues.

Minnesota Attorney General Keith Ellison disagreed with the decision, saying the platforms amount to gambling and that the state has authority to keep such activity out of its communities. Polymarket’s chief legal officer Neal Kumar said the ruling supports federal oversight rather than varying state rules, while a Kalshi spokesperson said states cannot prohibit activity outside their jurisdiction.

The case is part of a widening conflict between states and President Donald Trump’s administration over regulation of the fast-growing sector. AP reported that the federal government sued Connecticut, Arizona and Illinois in April over similar state efforts, while New York sued Coinbase and Gemini. Gambling regulators, tribal leaders and the American Gaming Association argue prediction markets resemble sports betting and other wagering; the CFTC is separately considering which event contracts should be barred as contrary to the public interest.