Back in May, Minnesota launched something of an experiment by passing a bill banning prediction markets like Polymarket and Kalshi, and then having Governor Tim Walz sign it. It was the first such statewide ban, but it was doubtful at the time that the law would ever see enforcement.
And it looks like it may not. According to NBC News, a preliminary injunction has now paused the law, preventing it from taking effect at the start of next month.
A May statement from CFTC Chairman Michael S. Selig in conjunction with the Trump Administration’s suit challenging the bill argued that the state was overreaching, “The new legislation represents the most aggressive move by a state to shut down CFTC-regulated markets and undermine the federal regulatory regime set up by Congress more than 50 years ago.”
NBC notes that Kalshi and Polymarket were also plaintiffs in the legal challenge.
The judge who issued the ruling, Katherine Menendez, seems to have accepted the plaintiff’s argument about the federal law supersedes the ban, and that they would be harmed by enforcement, writing that they “have met their burden to show they are likely to succeed, at least in part.”
The CFTC wrote in a letter to Menendez on Friday saying the clock was ticking, and the law was about to go into effect. “Absent a decision or a temporary stay by close of business on Tuesday, July 28, the CFTC will view its Motion as constructively denied,” the CFTC wrote, adding that it would start the appeals process at that point.
