Key Facts

• A federal judge, Katherine Menendez, of the U.S. District Court for the District of Minnesota, ruled that Minnesota's law banning prediction markets likely runs afoul of the Commodity Exchange Act.
• The law, which was recently passed in Minnesota, would ban prediction market operators from offering their products in the state and criminalize their operation.
• The Commodity Futures Trading Commission, along with Kalshi and Polymarket, had sued Minnesota earlier this year, arguing that the state law violated the CFTC's jurisdiction to oversee "swaps," which prediction market contracts are structured as.
• The judge found that the plaintiffs had shown they were likely to succeed in their arguments that the law underpinning U.S. commodities exchanges preempts the state law, and that the CFTC has jurisdiction over these products.
• The preliminary injunction will last until a final decision on the merits is reached, and not granting it would have caused "irreparable harm" to Kalshi and Polymarket, according to the ruling.