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Judge grants injunction against Minnesota prediction markets law

Legal Writer

Publish Date: Jul 28, 2026

Fact checked by: Matt Moreno

Key Points

Statute bans prediction market operation and promotion in Minnesota
Law set to take effect on Aug. 1, 2026
Court order means Minnesota officials cannot enforce statute while the trial is ongoing

At least until the U.S. District Court for the District of Minnesota rules on a trio of lawsuits involving the state’s law concerning prediction market trading, officials in Minnesota are legally barred from enforcing that statute. That means Minnesotans will continue to have access to prediction market exchanges while the court considers whether that law is valid.

Monday’s court order granting the injunctive relief doesn’t do much to telegraph the court’s potential stance on the larger legal questions. It’s possible that a much higher court may intervene before the legal process in Minnesota fully plays out, too.

General views of the Minnesota State Capitol on October 22, 2023 in Saint Paul, Minnesota.

(Photo by AaronP/Bauer-Griffin/GC Images)

Judge gives prediction market operators temporary cover

In the July 27 decision, Judge Katherine Menendez wrote that “the court finds that Plaintiffs have met their burden to show they are likely to succeed, at least in part, on their express-preemption claims, that they face a threat of irreparable harm, and that the balance of harms and the public interest weigh in favor of entering a preliminary injunction barring enforcement of Minnesota’s prediction market statute until a final decision on the merits is reached.” It’s a tentative win for the plaintiffs in the consolidation of three cases against one of the most restrictive statutes governing event contract trading in the United States.

Minnesota enacted the law in question in May as part of its omnibus spending plan. The code bans the offering of most types of event contracts in Minnesota and also creates civil penalties for promoting prediction market exchanges as it deems that conduct illegal gambling activity.

The U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Department of Justice (DOJ) sued Minnesota shortly thereafter, as did Kalshi and Polymarket. All three complaints levied nearly identical arguments against the constitutionality of the law, so the court consolidated those cases.

That consolidated case has yet to go to trial but Minnesota is nonetheless enjoined from enforcing the statute until the court rules on the merits of the case. The order granting the injunction stuck closely to the question at hand, perhaps in anticipation of guidance from the U.S. Supreme Court.

Order takes tentative stance as Supreme Court intervention looms

In the Monday ruling, Menendez gives credence to the plaintiffs’ arguments as potential winning cases in court but stops well short of signaling that the court is leaning that way. Such a position is proper in this context, as the order merely concerns the question of the preliminary injunction.

Menendez acknowledges that various courts have already considered the same issues across the country, producing disparate and even conflicting readings of the relevant statutes. That in and of itself is a sign of apprehension amid the possibility of better information becoming available.

In April, the U.S. Third Circuit Court of Appeals upheld a lower court ruling granting similar relief to Kalshi from New Jersey officials attempting to enforce state gambling laws. New Jersey declined an initial appeal option for an en banc review of that affirmation and has instead started the process to appeal that ruling to the U.S. Supreme Court.

Potential impact of Supreme Court review on Minnesota law

If the Supreme Court takes up the case, then the situations in Minnesota and other court rooms across the country become “first mover” matters. The Supreme Court’s decision; whether to overturn the Third Circuit’s affirmation, uphold that decision, or remand it to the Third for further consideration; will at least guide the deliberations of lower courts if not prove some complaints untenable to pursue further.

Menendez’s order maintains the status quo in Minnesota for prediction market exchange access. The uncertainty in that decision reflects the uncertain future for those exchanges in the country as a whole.

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