Federal Judge Blocks Minnesota’s Ban on Prediction Markets Following CFTC Challenge

A Minnesota federal judge has temporarily halted the state’s forthcoming prohibition on prediction markets, siding with a request from the Commodity Futures Trading Commission (CFTC). The temporary restraining order prevents enforcement of the law, signed by Governor Tim Walz in May after legislative approval, until a final court ruling is reached. The CFTC, along with market operators Kalshi and Polymarket, had sued to block the measure, which was slated to take effect on August 1.

Minnesota Attorney General Keith Ellison pushed back against the ruling, stating: “Prediction markets are gambling, plain and simple, and Minnesota has every right to keep predatory gambling out of our communities.” He acknowledged the complexity of the legal issues but pledged to continue defending the state’s law. The CFTC had previously warned it would seek appellate intervention if no decision came by July 28, arguing that federal authority alone governs derivatives and futures trading.

The decision marks a significant win for prediction market advocates and mirrors a recent outcome in Arizona. There, a federal judge also granted a CFTC-requested restraining order, giving Kalshi temporary protection from state prosecution while its case proceeds.