A federal judge has temporarily blocked Minnesota from enforcing its new prediction market felony law against federally regulated exchanges including Kalshi and Polymarket US. The July 27 order comes days before the statute was set to take effect on Aug. 1. The ruling protects CFTC-designated contract markets while litigation continues.
Judge Katherine Menendez granted preliminary injunctions requested by the CFTC, KalshiEX and QCX, which operates as Polymarket US. The order bars Minnesota officials from enforcing Minn. Stat. § 609.7615 against qualifying exchanges until a final decision.
The court found that the Commodity Exchange Act likely preempts parts of the state law for certain event contracts that qualify as swaps. Markets on a Senate election, World Cup winner and similar topics were identified as likely covered, while others were not.
Polymarket US welcomed the decision and said it expects to continue serving Minnesota users. Attorney General Keith Ellison said the state disagrees with the ruling and will continue defending the law.
