Federal judge blocks Minnesota’s prediction market ban days before it takes effect

Tech NewsFederal judge blocks Minnesota’s prediction market ban days before it takes effectThe ruling follows lawsuits from the Justice Department, the Commodity Futures Trading Commission, Polymarket and Kalshi.State capitol building in St. Paul, MN. Michael Siluk / UCG/Universal Images Group via GShareAdd NBC News to GoogleJuly 27, 2026, 5:53 PM EDTBy Samantha ElkinsA federal judge granted a preliminary injunction pausing Minnesota’s first-of-its-kind prediction market ban Monday, days before it was slated to go into effect. The ruling comes after the Justice Department and the Commodity Futures Trading Commission, along with Kalshi and Polymarket US, filed lawsuits responding to the law, which was scheduled to go into effect Aug. 1.In her order, U.S. District Judge Katherine Menendez ruled that the plaintiffs “have met their burden to show they are likely to succeed, at least in part,” on their claims that federal law preempts the ban, and that they face a threat of irreparable harm if it took effect.The order forbids enforcement of the law against entities registered as designated contract markets with the CFTC.The plaintiffs argue the ban is preempted by federal law, which gives the CFTC exclusive authority to regulate the event contracts traded on their federally registered exchanges. Menendez wrote in a footnote of the order that “the Minnesota statute may not be preempted in all its applications. But the Court finds the state law is likely preempted in many respects. Therefore, temporarily enjoining enforcement of the statute maintains the status quo while enabling further development on this issue and others.”The decision comes following the Commodity Futures Trading Commission’s letter Monday, which informed the court that it planned to escalate their motion to the appellate court if they didn’t receive a response by the next day. The CFTC has made several efforts to stop Minnesota’s prediction market ban and initially asked the court for a decision by Jul...