Minnesota, the first US state to prohibit prediction markets, was prevented from enforcing the law by a federal court ruling just days before the ban was scheduled to take effect. But while Minnesota was stopped from enforcing a total ban, the state may ultimately be allowed to prohibit some types of prediction-market wagers.
The Trump administration and the two largest prediction markets—Kalshi and Polymarket—sued Minnesota after the state enacted the law in May. The cases were consolidated, and a ruling issued yesterday imposed a preliminary injunction blocking the law that was scheduled to take effect on August 1.
Minnesota lawmakers saw prediction markets as indistinguishable from gambling, but the US Commodity Futures Trading Commission (CFTC) argues it has exclusive authority to regulate the platforms under federal law. One of the primary legal questions is whether event contracts are "swaps," which are regulated by the CFTC.
