Court halts Minnesota law banning prediction markets

Key Points:

• A federal judge has temporarily blocked Minnesota’s law banning prediction markets, siding with the U.S. Commodity Futures Trading Commission (CFTC) and platforms Kalshi and Polymarket, citing likely success in their legal challenge and potential irreparable harm.
• The Minnesota law, set to criminalize creation and operation of prediction markets, will remain blocked while the lawsuit continues, amid disputes over whether federal or state authorities have regulatory jurisdiction.
• Minnesota Attorney General Keith Ellison argues prediction markets constitute gambling and the state has the right to regulate them, while Kalshi and Polymarket maintain that federal law via the CFTC governs these platforms, preventing a patchwork of state regulations.
• The CFTC, under Trump appointee leadership, has asserted exclusive jurisdiction over prediction markets and is actively challenging state attempts to regulate or ban them, leading to multiple ongoing lawsuits in several states.
• The American Gaming Association and tribal gambling regulators claim prediction markets cause significant state tax revenue losses and constitute unlawful gambling, while the CFTC is considering new rules to define which event contracts may be barred from regulated prediction markets.