#明尼苏达预测市场禁令被叫停 Federal judge halts Minnesota’s prediction market ban

On July 27, a U.S. federal court ruled to temporarily block the state of Minnesota from enforcing a “Prediction Markets” ban scheduled to take effect soon. This means that until the case is finally resolved, the well-known prediction market platforms Kalshi and Polymarket can continue offering services to users in Minnesota.

The ruling was made by U.S. District Court Judge Katherine Menendez. She granted the plaintiffs’ request for a preliminary injunction, saying the platforms are likely to be able to show that federal law gives the U.S. Commodity Futures Trading Commission (CFTC) regulatory authority over prediction markets, so the new Minnesota law may be limited by the doctrine of Federal Preemption.

In May this year, Minnesota passed a statewide ban on prediction markets—the first such ban nationwide. The Minnesota legislature adopted a groundbreaking law prohibiting operators, promotion, or assistance in operating prediction market platforms within the state. Violations could result in criminal penalties.

Prediction markets allow users to buy and sell contracts on future events, such as:
Presidential or congressional election outcomes
Interest-rate changes and inflation data
Sports event results
Events such as weather and economic indicators
Supporters say these platforms are financial derivatives markets, reflecting the probability of events occurring through trading. Opponents argue that they operate very similarly to gambling and should be regulated under state gambling laws.

Kalshi and Polymarket filed a lawsuit challenging the new law. With support from the CFTC, the two companies jointly sued in federal court. They argue that their trading products are “Event Contracts” regulated under the Commodity Exchange Act, falling under federal oversight rather than what states define as gambling businesses, so individual states do not have the authority to ban them separately.

In its decision, the court said the plaintiffs have already presented persuasive legal grounds, so during the case proceedings, the status quo should be maintained to prevent businesses from suffering irreparable losses.

The state government insists that this is gambling. Minnesota Attorney General Keith Ellison also maintains that these platforms are essentially gambling websites. The state points out that many prediction markets let people place bets on sports events, political elections, or even social events, which it says is not fundamentally different from traditional gambling. If allowed to develop, the state argues, it would weaken the long-established bc regulatory regime of the state government and increase consumer risk. However, the judge said that at the current stage, federal law is likely to take priority over state law, meaning the state government is temporarily barred from enforcing the ban. She also emphasized that the case will continue to be litigated, and the scope of the ruling could still be adjusted in the future based on additional evidence.

In recent years, a regulatory battle has erupted across multiple U.S. states. As the prediction market industry has grown rapidly—especially during the 2024 U.S. presidential election when trading volumes surged—Kalshi and Polymarket have become among the most watched prediction platforms globally.

As the business expanded, several U.S. states began taking regulatory action, including Washington, Massachusetts, Nevada, New York, Michigan, among others, which sought to restrict or sue related platforms on the grounds of violations of state gambling laws. Different courts have issued different rulings so far, continuously expanding legal conflicts between federal oversight and state oversight.

Legal experts say this case involves not only Minnesota but could also influence the future direction of prediction markets across the United States. If the final court ultimately finds that federal law has priority, states’ ability to restrict prediction markets would be significantly limited. Conversely, if state governments prevail, other states may also roll out similar bans.

At present, before a final ruling by the federal court, Kalshi and Polymarket can continue operating in Minnesota. The legal dispute between the two over whether prediction markets are financial products or gambling activities is also expected to remain an important case in U.S. financial regulation.