Judge Blocks Minnesota Prediction Market Ban—For Now
A federal injunction halts Minnesota's crackdown on Kalshi and Polymarket pending a swap-definition ruling.
A federal judge blocked Minnesota's attempt to ban Kalshi and Polymarket from operating in the state as of July 28, 2026, ruling that not every prediction market contract qualifies as a swap under federal law.
Why It Matters
The injunction hands prediction market platforms a significant procedural win, but the legal question remains unsettled — the ruling is temporary, not a final verdict. The core dispute turns on whether individual event contracts fall under the Commodity Exchange Act's swap definition, which would trigger federal preemption of state bans. For users and operators, this keeps both platforms accessible in Minnesota while litigation continues. If the federal preemption argument holds at trial, it could neutralize similar state-level attempts to restrict prediction markets across the U.S.
Context
Minnesota had moved to prohibit Kalshi and Polymarket from offering contracts to state residents, citing concerns that the products constituted unregulated gambling under state law. Kalshi operates under CFTC oversight as a designated contract market, a regulatory status it secured after a separate legal battle in 2024. Polymarket, which is based offshore and restricts U.S. users on its main platform, has nonetheless faced domestic regulatory scrutiny (per Decrypt, July 28, 2026).
What's Next
The court still needs to resolve whether each contract type individually meets the federal swap definition — a fact-intensive analysis that could take months. A ruling against the platforms on that question would remove the federal preemption shield and potentially revive the Minnesota ban.
Gambling involves financial risk. Prediction market contracts can result in total loss of staked capital.
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