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Judge Blocks Minnesota’s Prediction Markets Ban for Kalshi and Polymarket

Quick Glance at the Facts

• On Monday, July 27, 2026, U.S. District Judge Katherine Menendez granted a preliminary injunction stopping Minnesota from enforcing its new ban on prediction markets.
• Kalshi and Polymarket can keep offering event contracts to Minnesota residents while the case moves forward.
• The CFTC, Kalshi, and Polymarket sued to block the law, which Democratic Governor Tim Walz signed in May 2026.

A federal judge has stopped Minnesota from enforcing its first-in-the-nation law that would have banned prediction markets this week. That means Minnesota residents can keep trading event contracts on Kalshi and Polymarket for now, even though the state still wants the platforms gone.

A Closer Look at the Minnesota Ruling

Judge Menendez granted the injunction on Monday. The plaintiffs were the U.S. Commodity Futures Trading Commission, Kalshi, and Polymarket. The law was set to take effect Friday. It would have made it a crime to operate, host, or promote the platforms in the state.

In her ruling, Menendez found that certain event contracts from CFTC-regulated platforms likely count as “swaps” under federal law. That would place them under the CFTC, not state regulators. Prediction markets let people trade contracts on the outcome of real events, which is different from placing a bet at a sportsbook. Our prediction markets versus sports betting explainer breaks down the difference.

Kalshi said in court filings that it had more than 90,000 users in Minnesota by the end of May 2026, who traded millions of dollars. Kalshi spokesperson Elisabeth Diana said in a statement that “states cannot ban things that they don’t have jurisdiction over.”

What’s Next for the Case

The injunction is temporary. Menendez said she could narrow it later if she decides some event contracts do not meet the legal definition of swaps. In that case, the plaintiffs would have weaker claims.

Minnesota Attorney General Keith Ellison said the state will keep defending the law. He called prediction markets “gambling, plain and simple” and said Minnesota has “every right to keep predatory gambling out of our communities.”

The fight is not just in Minnesota. More than a dozen states have tried to curb prediction markets using existing anti-gambling laws, with mixed results. Massachusetts, Michigan, Nevada, and Washington won court orders restricting Kalshi. Arizona temporarily sided with the CFTC. On the same day as the Minnesota ruling, a Manhattan federal judge denied Kalshi an injunction against New York regulators. It was the second such denial this month, Gambling Insider reported. These split outcomes point toward the U.S. Supreme Court eventually deciding whether federally regulated prediction markets can offer contracts on sports events.

How This Impacts Minnesota Players

Minnesota residents can still use Kalshi and Polymarket to trade event contracts while the case continues. Nothing changes there right now, and the status of casino gambling and sports betting remain the same.

Prediction market contracts and sportsbook wagers are separate products, and the state has not backed down on either. For a clear picture of what you can and cannot legally do where you live, check our Minnesota gambling guide.

GamblingNerd Take

The judge did not decide who wins; she kept the platforms open in Minnesota while the courts sort out whether these contracts are federal swaps. If you trade on Kalshi or Polymarket in Minnesota, it might be a good idea to empty out your wallet and stop placing new contracts. In the event the platforms are banned, it’s better to be already out of the race than waiting on a forced payout or refund.