A US federal judge granted a preliminary injunction blocking Minnesota's ban on prediction markets, allowing Kalshi and Polymarket US to continue operating in the state while legal challenges proceed.
The ruling halts enforcement of Minnesota legislation that would have prohibited prediction market platforms from offering services to state residents. Both Kalshi, the largest CFTC-regulated prediction market, and Polymarket US, the decentralized prediction platform, challenged the constitutionality of the law. The judge determined the platforms demonstrated a likelihood of success on their legal claims and that blocking the ban temporarily serves the public interest.
Minnesota passed the prediction market restriction as part of broader gambling regulation efforts. State lawmakers argued prediction markets constitute illegal wagering under state law. Kalshi and Polymarket US countered that prediction markets serve informational and hedging purposes distinct from gambling, and that the ban likely violates free speech protections under the First Amendment.
This marks a significant win for the prediction market sector, which has faced increasing regulatory scrutiny across multiple states. Kalshi previously fought restrictions in New York and secured a CFTC approval for event contracts, establishing itself as a regulated alternative to offshore platforms like Polymarket on Polygon. The Minnesota decision signals judicial skepticism toward blanket state bans on prediction markets.
The injunction remains in effect while the court considers the platforms' full constitutional challenge. Similar legal battles continue in other states as prediction markets gain mainstream adoption. Political markets on Polymarket have attracted billions in trading volume during election cycles, drawing both retail and institutional interest.
The preliminary injunction gives Kalshi and Polymarket US breathing room in Minnesota's market while establishing potential precedent for other jurisdictions attempting stricter regulation. The outcome will likely influence how other states approach prediction market legislation.