Minnesota tried to ban a new type of betting. The plan was to stop sites like Kalshi and Polymarket. That was the plan.
A federal judge shut it down. The court said Minnesota cannot make its own rules for this. It happened on Monday. The ban is dead before it started.
A federal judge in Minneapolis stopped the state cold. District Judge Katherine Menendez issued the block. She acted on Monday. This stop was a preliminary order. It came from a request by the companies, and it also came from the federal regulator.
The state law was set to start on Saturday. Now it can’t take effect. The judge said federal law likely blocks the state rule. The state tried to ban these markets first in the nation. The federal government says it has the power.
Minnesota Prediction-Market ban Blocked in Federal Court — A federal judge temporarily halted Minnesota’s prediction-markets ban just days before it was set to take effect, escalating the legal fight over markets used by firms like Kalshi and Polymarket. The ruling sets up…
— BizToc (@biztoc) July 28, 2026
Gov. Tim Walz signed the ban into law in May. The law made it a crime to run these sites. It also banned hosting them. Promoting them was also a crime. But the federal regulator disagrees. The CFTC says it controls these markets. The companies agree with the federal view.
The judge looked at the legal definitions. She said these event contracts fit the definition of a “swap”. This is a type of derivative contract. The federal agency regulates swaps. The state can’t regulate them. This is the key point.
The CFTC says states can’t police these deals. This view holds under the current administration. The judge agreed with this stance. She noted several examples from Kalshi. She also noted examples from Polymarket. Both are federal-regulated entities.
The judge didn’t rule on every single case. She might make the order narrower later. She said she needs to check each contract type. But for now, the ban is blocked. The state can’t enforce the law. The companies can keep operating.
