A federal judge has temporarily stopped Minnesota’s first-in-the-nation ban on prediction markets from taking effect, days before it was due to begin on 1 August. The ruling allows platforms such as Kalshi and Polymarket to continue operating in the state while the legal challenges are decided, highlighting a wider dispute over whether states or federal regulators control these markets.

Governor Tim Walz signed the law in May after bipartisan legislative approval; it would have made operating or advertising prediction markets a felony. The Commodity Futures Trading Commission, Kalshi and Polymarket sued, arguing that federal law governs the relevant contracts; Minnesota Attorney General Keith Ellison said the state would continue defending its law, which it views as protection against predatory gambling.