Federal court blocks Minnesota prediction market ban pending Kalshi’s legal challenge

Kalshi has celebrated a federal court ruling that temporarily halts Minnesota's new prediction market law from taking effect. The decision, issued by U.S. District Court judge Katherine M. Menendez, keeps the statute from enforcing its planned August 1, 2026 deadline, and highlights a broader dispute over whether states can regulate federally regulated markets.

Minnesota was the first state to pass a ban on prediction markets, and this court decision has already prevented it from being enforced less than two months after enactment, according to a spokesperson for Kalshi. Elisabeth Diana, Kalshi's spokesperson, emphasized that today's ruling confirms that regulation of prediction markets belongs to federal authorities alone.

The case signals that federal law may be preempting Minnesota's attempt to ban Kalshi and Polymarket US, which were both challenged by the Commodity Futures Trading Commission (CFTC). Minnesota's defense centered around the state's authority to regulate gambling and protect the public welfare, but the court found the plaintiffs had a strong likelihood of success, and ruled in their favor until the case is completely resolved.