Kalshi and Polymarket have obtained a preliminary injunction from a federal court, suspending the enforcement of the prediction market ban in Minnesota

According to CoinDesk, U.S. District Court Judge Katherine Menendez in Minnesota ruled that the state law classifying the operation of prediction markets as a criminal offense likely violates the federal Commodity Exchange Act (CEA), and granted a preliminary injunction to Kalshi, Polymarket, and the U.S. Commodity Futures Trading Commission (CFTC), suspending the enforcement of the state law.

The judge found that prediction market contracts structurally fall under the category of "swap" products regulated by the CFTC, and that federal law takes precedence over state law, with the three plaintiffs "likely to prevail in a formal trial." Additionally, the judge noted that failing to suspend the enforcement of the law would cause "irreparable harm" to Kalshi and Polymarket. This preliminary injunction will remain in effect until a final judgment is made in the case.