A federal judge on Monday halted Minnesota's law banning prediction markets, days before it was set to take effect. U.S. District Judge Katherine Menendez granted a preliminary injunction blocking the state measure after finding that the Trump administration and prediction market operators Kalshi and Polymarket are likely to succeed on the merits of their argument that the ban is pre-empted by federal law.
What the Left Is Saying
Minnesota Attorney General Keith Ellison said the state would continue fighting to protect consumers from speculative betting products. Minnesota lawmakers who sponsored the bill argued that prediction markets amount to illegal gambling and expressed concern about their potential effects on election integrity. State Senator Erin Maye Quade, a co-author of the legislation, said the ruling was a temporary setback and maintained that federal regulators should not override state consumer protection laws.
What the Right Is Saying
The Trump administration praised the ruling as a victory for federal regulatory authority. Commerce Secretary Howard Lutnick called prediction markets an important tool for price discovery and economic forecasting. Republican lawmakers argued that states cannot unilaterally ban legal financial instruments operating under federal oversight, with Senate Banking Committee Republicans issuing a statement saying the injunction protects interstate commerce from state overreach.
What the Numbers Show
Minnesota's law was scheduled to take effect July 31, making Minnesota one of only two states with explicit bans on election prediction markets. The Kalshi exchange, which launched federally approved event contracts in 2024, reported trading volume exceeding $1 billion before the Minnesota ban was set to roll out. Polymarket processed approximately $3.5 billion in trades during the 2024 U.S. presidential election cycle.
The Bottom Line
The preliminary injunction pauses enforcement while the case proceeds through federal court. Judge Menendez's finding that challengers are likely to succeed on pre-emption grounds suggests the administration has a strong initial case, but the underlying legal question about state authority over prediction markets remains unsettled. A full trial is expected to proceed in coming months.