Kalshi and Polymarket Score Court Win as Judge Blocks Minnesota’s Prediction Market Ban

Kalshi and Polymarket have secured a major legal win as a US federal judge temporarily halted Minnesota’s ban on prediction markets. As the ruling comes just days before the law was expected to take effect, it allows the prediction market platforms to continue operating in the state.

The development marks another major chapter in the ongoing legal battle between US states and prediction market platforms. While the US states claim that these platforms violate gambling laws, they argue that the Commodity Futures Trading Commission (CFTC) is responsible for their oversight. As the fight goes on, Judge Katherine Menendez stated in her latest ruling that the prediction market platforms may succeed in proving their arguments.

Judge blocks Minnesota’s prediction market ban

According to a Reuters report, a federal judge has temporarily stopped Minnesota from implementing its ban on prediction markets, which was set to take effect on Saturday. If implemented, the move would have been the first statewide ban on prediction market platforms in the US. However, as the judge blocked the ban, platforms like Kalshi and Polymarket have seen a major legal victory and will be able to continue operating in the state.

The report claims that US District Judge Katherine Menendez granted a preliminary injunction, blocking the state from enforcing the ban. The judge stated that the prediction market platforms are likely to prove that federal law takes precedence over the state’s ban. For the judge, the US CFTC has the primary authority over these platforms.

“Today’s decision makes it clear: States cannot ban things that they don’t have jurisdiction over,” stated a Kalshi spokesperson, celebrating the court ruling. The platform sees it as a major win for federally regulated prediction markets.

However, Minnesota Attorney General Keith Ellison shared disagreements with the ruling. He argued, “Prediction markets are gambling, plain and simple, and Minnesota has every right to keep predatory gambling out of our communities.” He believes that the legal battle would continue until the governance of prediction markets is reshaped.

Why did Minnesota stand against Kalshi and Polymarket?

Notably, Minnesota’s ban on prediction market platforms, such as Polymarket and Kalshi, has been reportedly a part of the state’s broader public safety bill. State lawmakers see these platforms functioning more as gambling than financial products.

As these firms encourage betting on real-world events, they should be regulated under the state gambling laws, stated the lawmakers. Minnesota State Representative Emily Greenman stated, “Gambling has always been a public health and a public safety issue since states have been regulating it, and that has always been an uncontested fact.”

At the same time, the lawmakers have clarified that the ongoing legal battle doesn’t target the users of these platforms. They wanted to protect the users and thus are targeting companies like Kalshi and Polymarket.

Many US States are challenging prediction markets

Interestingly, Minnesota is not the only state in a fight with prediction markets. Several other US states have also taken the initiative to stop these platforms from operating in the region. These authorities stand together, arguing that the platforms’ event contracts resemble gambling and should be regulated under state laws.

States like Nevada, New Jersey, Maryland, Illinois, Ohio, and Montana have already issued cease-and-desist orders or other enforcement actions against these platforms. As CoinCodex recently reported, the Washington court sided with the lawmakers, blocking the sports event contracts of Kalshi. Massachusetts was the most recent state to open an investigation into the sports-related event contracts.

Source:: Kalshi and Polymarket Score Court Win as Judge Blocks Minnesota's Prediction Market Ban