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Yesterday, a federal judge blocked Minnesota from enforcing its prediction market ban, allowing Kalshi and 
Polymarket to continue operating in the state while, the same day in New York, a judge denied Kalshi's emergency injunction request, the Block reported.
What's the Scoop?
- The Minnesota Ruling: U.S. District Judge Katherine Menendez granted the preliminary injunction requested by the CFTC, Kalshi, and Polymarket, blocking a state law that would have banned prediction markets as of August 1st. In her explanation, Menendez ruled that federal law supersedes state law, giving the CFTC exclusive jurisdiction over contracts traded on registered exchanges. Interestingly, Menendez is a Biden-appointed Judge with Democratic roots.
- The Case: The CFTC, Kalshi, and Polymarket sued Minnesota in May, arguing the state was unlawfully regulating federally overseen derivatives markets that fall under the CFTC's exclusive jurisdiction.
- The Losses Elsewhere: SDNY Judge Analisa Torres denied Kalshi's emergency injunction pending appeal on Monday, after rejecting its preliminary injunction request earlier this month. The Block also noted that Michigan issued a temporary restraining order against Kalshi's sports contracts in late June, and a Washington court granted a similar block last week, finding the platform operates illegal gambling under state law.
