Kalshi, Polymarket Granted Federal Court Preliminary Injunction, Minnesota Prediction Market Ban Suspended

TechFlow reports, July 28. According to CoinDesk, U.S. District Court for the District of Minnesota Judge Katherine Menendez ruled on July 28 local time that the Minnesota state law criminalizing prediction market operations likely violates the federal Commodity Exchange Act (CEA), and granted a preliminary injunction to Kalshi, Polymarket, and the U.S. Commodity Futures Trading Commission (CFTC) to suspend the enforcement of the state law.

The judge held that prediction market contracts structurally fall under "swap" products within the CFTC regulatory jurisdiction, federal law preempts state law, and the three plaintiffs are "likely to succeed on the merits at trial". Additionally, the judge noted that failing to suspend the enforcement of the law would cause "irreparable harm" to Kalshi and Polymarket. The preliminary injunction will remain in effect until the final judgment in the case is rendered.