Judge Blocks First State Law That Would Have Banned Prediction Markets (arstechnica.com)
- Reference: 0184738600
- News link: https://yro.slashdot.org/story/26/07/28/1858208/judge-blocks-first-state-law-that-would-have-banned-prediction-markets
- Source link: https://arstechnica.com/tech-policy/2026/07/judge-blocks-first-state-law-that-would-have-banned-prediction-markets/
> Minnesota, the first US state to prohibit prediction markets, was [1]prevented from enforcing the law by a federal court ruling just days before the ban was scheduled to take effect. But while Minnesota was stopped from enforcing a total ban, the state may ultimately be allowed to prohibit some types of prediction-market wagers. The Trump administration and the two largest prediction markets -- Kalshi and Polymarket -- sued Minnesota after the state [2]enacted the law in May . The cases were consolidated, and [3]a ruling (PDF) issued yesterday imposed a preliminary injunction blocking the law that was scheduled to take effect on August 1.
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> 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. Swaps are defined broadly in US law to include contracts in which payment "is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence." 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.
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> Menendez wrote: "Specifically, it appears that whether the Minnesota statute is expressly preempted turns on whether the state law attempts to regulate trades in event contracts that qualify as "swaps" within the meaning of the CEA [Commodity Exchange Act]. And there are several examples of event contracts hosted by Kalshi and Polymarket US that fit that definition because they concern the occurrence of events with clear potential economic, financial, or commercial consequences that are neither remote or unattenuated. Kalshi and Polymarket US are designated contract markets, so the CFTC has exclusive jurisdiction to regulate transactions involving those 'swaps.'"
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> Menendez said the CFTC, Kalshi, and Polymarket met their burden of showing they are likely to succeed on the merits, so she issued "a preliminary injunction barring enforcement of Minnesota's prediction market statute until a final decision on the merits is reached." But she said Minnesota may be able to prohibit some types of event contracts offered on Kalshi and Polymarket because not all of them appear to meet the definition of swaps. For example, Menendez doesn't think prediction-market bets on the outcome of Love Island USA meet the legal definition of swaps. Minnesota could continue litigating the case in district court or ask a federal appeals court to overturn the preliminary injunction.
[1] https://arstechnica.com/tech-policy/2026/07/judge-blocks-first-state-law-that-would-have-banned-prediction-markets/
[2] https://yro.slashdot.org/story/26/05/20/0121248/minnesota-becomes-first-state-to-ban-prediction-markets
[3] https://storage.courtlistener.com/recap/gov.uscourts.mnd.234259/gov.uscourts.mnd.234259.48.0.pdf
Trump supports grifting? (Score:3)
Quelle surprise that Trump supports the gambing^Wgrifting sites.
Re:Trump supports grifting? (Score:4, Informative)
He flat out says his family uses inside information for financial gains. [1]https://www.yahoo.com/news/pol... [yahoo.com]
Now if you don't have a problem with this let me put it in terms you can understand.
Imagine if Obama said the exact same thing.
Now how do you feel?
[1] https://www.yahoo.com/news/politics/articles/donald-trump-says-his-children-have-inside-information-as-stock-trades-draw-scrutiny-112504887.html
Re: (Score:2)
LOL /. has become a contest to be provably more stupid than SuperKendall.
Also, for all anyone knows Obama did say and do everything he wanted. Judging by the outrage over his tan suit, plenty was said on a daily basis.
Re: (Score:2)
Why do you think the deportations under Obama was less controversial?
Your answer to this will say more than you know about your politics and worldview.
Re: (Score:1)
They're okay with the hypocrisy. Here in FL the governor has been pushing hard for eliminating property taxes for homesteads. If that passes, it will essentially defund the police . Yeah, can't say I recall that previously being a Republican position.
It all makes sense when you just realize their justification is "It's fine when we do it."
Re: (Score:2)
Quelle? Looks like someone needs a visit from ICE /s
The CFTC (Score:2)
can go suck a giant dick, because nothing on Kalshi or Polymarket are swaps. It's gambling.
"They are swaps because they're 'event contracts'!"
I don't give a flying fuck. That just means they are gambling...with event contracts. The contracts are the 'casino chips'; win and turn them into cash, lose and they go bye-bye. And if you really want to believe they are swaps, then local, state, and federal gambling laws should apply on top of any regulation by CFTC. The assholes who don't think this is gambling are
Re: (Score:1)
like a someone who was into hft from mid-2010s I can only say that all of your US stock market is gambling and I laugh at yer feeble attempts to deny it.
Re: (Score:2)
> all of your US stock market is gambling
It is.
I fundamentally disagree with all forms of stock markets and believe they should be eliminated worldwide. All companies should either be non-profit or for-profits, and all for-profits should be co-ops/profit shares among all employees. All utility providers should be non-profits and owned 100% by customers of that utility.
Re: (Score:2)
If you day trade, then yes... the stock market is gambling.
If you invest in low-cost index funds and hold them for a decent amount of time, the odds that you'll make money are almost 100%.
There's no analogously-safe way to use prediction markets.
Re: (Score:2)
In a lot of cases, maybe even most it could be that functionally but there are still real assets under it and real direct economic interests in the outcomes for parties to those contracts and instruments, that alone separates it from simple wagering which is what a prediction market is.
Most of stocks, options and other financial instruments shift risk, or speculatively take on risk for potential gain. "predicting" who will get an Oscar, with a payout if you're right or loss of your "investment" if you are n
Swaps manage financial risk; bets provide entertai (Score:2)
Financial swaps and gambling are differentiated by their economic function, legal classification, and risk management utility. While both involve a contingent transfer of money based on future uncertain events, swaps are commercial tools used to manage existing financial risk, whereas gambling creates artificial risk for entertainment or speculative profit.
Newspeak (Score:2)
Betting is now "prediction market"
Getting fired now called "Evaporating Financial Security" or "Involuntary separation"
Killing a product is now "Sunsetting a product"
"Non-performing loan" = a loan nobody's paying back
Bombing people is now called "kinetic action" ...
We live in the century of the euphemism.
These people need to be sent 'to a farm upstate'.
Re: (Score:2)
And which party do you support? These are the people you have argued for.
damned if they win or lose? (Score:3)
I don't follow prediction markets that closely, but it seems to me that win or lose, this ruling shows they're screwed either way.
If they lose, showing that these are unregulated forms of gambling, then the states can come after them.
If they win and the injunction is dismissed, it's because these prediction markets are operating like credit default swaps, which are heavily regulated. This would force every prediction market to operate through clearing houses, eliminate direct holding of users' funds, force them to to become registered dealers, and most importantly limit their market to those who have high discretionary assets, because at least regulated swaps require you to have $10M in discretionary assets to even buy swaps.
Again I may be missing something here, but I read this as the injunction being put on hold because they could essentially be swaps; if that holds, then it could be argued they must then act like swaps which are highly regulated and would kill their retail business. I'd be curious to know if I'm missing something about these though that would suggest a different analysis.
Re: damned if they win or lose? (Score:3)
Well, it falls to a jurisdiction in which there is a high chance of selective regulatory oversight/enforcement, given the conflict of interest with Trump's family vested interest in prediction markets.
Thou Shalt Not Block Corporate Profit (Score:2)
Even if that profit is derived by harming citizens.
- 1st rule of crony capitalism
This is no surprise (Score:1)
Once again the republican federal government comes down against states' rights to regulate themselves.
Trumplicans predictably prefer to allow their wanna-be dictator to allow Big Companies to screw the american public at every opportunity.
Gasp - A Trumpian move to be sure (Score:5, Insightful)
I mean..... it's no surprise since Trump probably has his fingers all through the prediction markets. We know how he's been manipulating the stock markets for gain already.
Re: (Score:2)
Don Jr is a paid "strategic advisor" to both [1]Kalshi [kalshi.com] and [2]Polymarket [reuters.com], and the private investment company he's partner in, 1789 Capital, invested millions into Polymarket. Reportedly the Trump family owns stock in both companies.
The corruption and grift has become so blatant that nobody even bothers reporting on it anymore.
[1] https://news.kalshi.com/p/donald-trump-jr-strategic-advisor
[2] https://www.reuters.com/business/polymarket-secures-investment-trump-jr-backed-1789-capital-2025-08-26/