Minnesota Tried to Make Prediction Markets a Felony. One Federal-Law Question Put It on Hold

By Isaac • July 27, 2026 11:36 pm •

Minnesota was days away from turning much of the prediction-market business into a felony.

A federal judge has now stopped the law before its August 1 effective date, handing Kalshi, Polymarket US and the Commodity Futures Trading Commission an early victory.

Early is the important word.

Judge Katherine Menendez issued a preliminary injunction, not a final judgment. Minnesota cannot enforce the new statute against CFTC-registered designated contract markets while the cases proceed, but the order leaves open a question that could eventually split the market contract by contract.

Are all event contracts federally regulated swaps, or only the ones tied closely enough to financial, economic or commercial consequences?

For now, the inability to draw that line