TLDR A federal judge halted Minnesota’s SF 3432, the first state law to criminalize prediction markets. The ruling grants Kalshi, Polymarket, and the CFTC a preliminary injunction. Judge Katherine Menendez said the plaintiffs are likely to win on preemption grounds. The law was set to take effect August 1 before the block. Minnesota Attorney General Keith Ellison disagrees with the ruling and may continue the fight.
A federal judge has stopped Minnesota from enforcing a state law that would have banned prediction markets. The ruling came on Monday, just days before the law was set to take effect on August 1.
U.S. District Judge Katherine Menendez issued a preliminary injunction in favor of Kalshi, Polymarket, and the Commodity Futures Trading Commission. Her order runs 44 pages and blocks the state from acting against exchanges registered with the CFTC.
Minnesota’s law, known as SF 3432, was the first of its kind in the country. It aimed to criminalize prediction markets operating within the state.
Judge Menendez found that the plaintiffs were likely to succeed on their preemption claims. She also ruled that the platforms would face irreparable harm if the law moved forward as planned.
What the ruling means for now
The injunction will stay in place until the court makes a final decision on the merits. This gives Kalshi and Polymarket room to keep operating in Minnesota while the legal case continues.
Kalshi spokesperson Elisabeth Diana responded quickly to the decision. She said the ruling sends a clear message to states considering similar bans.
“Minnesota was the first state to pass a law banning prediction markets, and a court prevented it from being enforced less than two months later,” Diana said. She added that states do not have jurisdiction to ban markets that fall under federal oversight.