A federal judge blocked Minnesota's ban on prediction markets, granting a preliminary injunction that lets Kalshi and Polymarket US keep operating in the state while their legal challenge proceeds.
Minnesota passed legislation restricting prediction market platforms from serving state residents, targeting the growing sector of event-based betting platforms. Kalshi and Polymarket US, two major prediction market operators, immediately challenged the law in court, arguing it violated their rights.
The judge's decision to grant a preliminary injunction represents a significant setback for Minnesota's enforcement efforts. The ruling allows both platforms to continue accepting bets from Minnesota users during the litigation, preventing the state from achieving an immediate shutdown while the case unfolds.
Prediction markets occupy a legal gray zone across the US. The platforms function as derivatives exchanges where users bet on outcomes of political elections, sports events, and other real-world occurrences. Supporters frame them as information markets that aggregate crowd wisdom, while critics and some regulators view them as gambling operations that skirt federal oversight.
Minnesota's approach differs from federal-level regulation. The Commodity Futures Trading Commission has granted licenses to Kalshi for certain limited contract types, while most prediction market activity remains in legal limbo. States have pursued varied approaches, with some permitting operations and others moving to restrict them.
The preliminary injunction standard requires Kalshi and Polymarket to demonstrate they face likely success on the merits of their constitutional challenge, that they suffer irreparable harm without the injunction, and that the balance of equities tips in their favor. The judge apparently found these factors satisfied.
The decision leaves Minnesota's broader regulatory goals on hold. The state's legislature enacted the ban believing it had the authority to protect residents from what it characterized as unregulated gambling. Now that authority faces judicial scrutiny during a period when prediction markets have gained mainstream attention and usage.
Both platforms will continue operating under this temporary