Minnesota, the first US state to prohibit prediction markets, was prevented from enforcing the law by a federal court ruling just days before the ban was scheduled to take effect. The Trump administration and the two largest prediction markets—Kalshi and Polymarket—sued Minnesota after the state enacted the law in May. Minnesota lawmakers saw prediction markets as indistinguishable from gambling, but the US Commodity Futures Trading Commission (CFTC) argues it has exclusive authority to regulate the platforms under federal law. One of the primary legal questions is whether event contracts are “swaps,” which are regulated by the CFTC. US District Judge Katherine Menendez in the District of Minnesota, a Biden appointee, said Minnesota’s total ban on prediction markets is likely to violate US law because many trades on Kalshi and Polymarket are swaps.