Judge blocks first state law that would have banned prediction markets

A federal judge blocked Minnesota’s new ban on prediction markets before it could take effect.

The court said the state is likely barred from enforcing a blanket ban because some Kalshi and Polymarket contracts may be federally regulated swaps under the Commodity Exchange Act.

The ruling leaves open the possibility that Minnesota could restrict certain event contracts that fall outside that federal definition.

The case is an early test of whether states can treat prediction markets as gambling or whether federal commodities law preempts them nationwide.