Critical Victory for Two Giant Platforms in the US: Ban Attempt Overturned by Court
A federal judge in the U.S. has issued a significant ruling in favor of Kalshi and Polymarket by halting Minnesota’s law banning prediction markets.
A development that has resonated widely in the crypto and finance worlds has occurred. Minnesota’s move to block prediction market operators was temporarily halted by the intervention of a federal judge. Judge Katherine Menendez ruled that the law enacted by the state conflicts with the federal Commodity Exchange Act (CEA) and that this situation violates the companies’ rights.
This litigation process brought together not only the platforms but also the U.S. Commodity Futures Trading Commission (CFTC). Kalshi, Polymarket, and the CFTC took a common stance against Minnesota’s law criminalizing prediction markets. The plaintiffs argued that the contracts on these platforms are actually “swaps”—a type of derivative transaction where two parties exchange financial instruments—and that the regulatory authority for these transactions lies with the CFTC, a federal agency, rather than with the states.
Critical Legal Victory for Prediction Markets
In her ruling, Judge Menendez stated that the plaintiffs have a high likelihood of succeeding on the merits. She emphasized that a significant portion of the transactions listed on the Kalshi and Polymarket platforms should be considered under federal law. The judge added that if this ban were not halted, the companies would suffer irreparable harm. The need for regulatory clarity, frequently voiced by industry representatives at major events like Consensus, was once again brought to the forefront by this court decision.
This preliminary injunction will remain in effect until the case is resolved on its merits. The court’s stance plays a decisive role in the future of prediction markets and the authority of federal agencies over this field. While Minnesota’s attempt at a ban has been thwarted for now, all eyes are on the final outcome of the lawsuit.