Prediction Markets Win Minnesota Court Fight as NFL Challenges CFTC and New Entrants Eye $1 Trillion Race

A federal judge in Minnesota temporarily blocked the state's ban on prediction markets on July 28, 2026, with fewer than four days to spare before the law was to take effect. Judge Katherine Menendez granted a preliminary injunction protecting Kalshi and Polymarket from a state statute that would have criminalized their operations, finding that the platforms are likely to succeed on federal preemption claims under the Commodity Exchange Act.

The ruling arrived on the same day the NFL formally told the Commodity Futures Trading Commission that its proposed prediction market rules fall short of protecting sporting events, and as 365Prediction founder Dr. Laila Mintas declared the event contract sector large enough for every new entrant, citing a quoted market size of $1 trillion. In a single 24-hour window, prediction markets in the United States registered a courtroom win, absorbed a major-league challenge, and gained a fresh wave of competitive entrants.

Updated July 2026

Key Facts

• Judge Katherine Menendez of the US District Court in Minnesota issued a preliminary injunction on July 28, 2026, blocking the state's prediction market ban from taking effect on August 1, 2026 (Bloomberg Law).
• The NFL attracted approximately $30 billion in wagers during its most recent season, representing up to 60% of annual US sports betting volume, according to figures cited in the league's letter to the CFTC (CasinoBeats).
• 365Prediction CEO Laila Mintas cited a quoted market size of $1 trillion for the event contract sector (CasinoBeats).
• The CFTC issued proposed rules for prediction market event contracts in June 2026, covering which sports contract types may remain permissible (Greenberg Traurig analysis of CFTC docket).

Minnesota Federal Court Blocks the Prediction Market Ban

Judge Menendez of the US District Court granted the preliminary injunction after Kalshi, Polymarket, and the CFTC jointly sued Minnesota earlier in 2026 following the state's passage of legislation criminalizing prediction market operations within its borders. The injunction pauses that law while the full case is heard on its merits.

The court found the three plaintiffs "are likely to succeed, at least in part, on their express-preemption claims." The ruling determined that Minnesota's statute probably conflicts with the federal Commodity Exchange Act, particularly around contracts structured as swaps under federal commodities jurisdiction. Granting the pause was also necessary, the court found, to prevent "irreparable harm" to the operators while litigation proceeds.

Judge Menendez acknowledged that some contracts, citing "Love Island" predictions as an illustrative example, might technically fall within the scope of Minnesota's law, but found that crafting a narrower injunction was not practically feasible given how the platforms operate.

"States cannot ban things that they don't have jurisdiction over." - Kalshi spokesperson Elisabeth Diana, in response to the Minnesota ruling.

Why the Ruling Is a Win But Not a Final Victory

The injunction is a preliminary decision, not a permanent one. Judge Menendez has not ruled on the underlying merits of the case; she has determined only that pausing the ban while the court hears the full argument is appropriate. A final ruling could still go either way.

What the decision does confirm is that federal preemption is a credible legal shield for CFTC-regulated prediction market platforms. The Special Rule embedded in the Commodity Exchange Act, introduced through the 2010 Dodd-Frank Act, defines "gaming" in a way the court found ambiguous enough to question Minnesota's authority to ban contracts on sporting outcomes, elections, and weather events.

Former Senator Chris Dodd, whose name is on that legislation, pushed back directly on that reading on the same day as the ruling, stating that "Congress specifically included the term 'gaming' to prohibit sports-related event contracts viewed as sports gambling." The divergence between the court's reading and the stated legislative intent underscores that this legal question is far from settled.

The NFL Tells the CFTC Its Proposed Rules Fall Short

On the same day as the Minnesota decision, the National Football League submitted a formal letter to the CFTC stating that the regulator's June 2026 proposed prediction market rules "fall significantly short of protecting the integrity of sporting events and the fans who participate in these markets."

The letter, obtained by journalist Dustin Gouker, sets out a list of contract types the league wants banned outright: contracts decided by a single individual such as a referee call, contracts on player injuries described as "inherently objectionable," contracts "easily manipulable by a single person," those depending on "discretionary officiating choices," and contracts "known or knowable in advance of settlement."

The NFL's argument is grounded in market integrity. With approximately $30 billion wagered on NFL games last season, accounting for up to 60% of annual US sports betting volume by some estimates, the league argues that allowing granular game-moment contracts without robust insider trading controls creates a systemic risk to the sport's competitive credibility.

What the NFL Is Specifically Asking the CFTC to Do

Beyond banning specific contract categories, the NFL demanded that the CFTC implement several concrete structural safeguards:

• Raise the minimum age for sports prediction contracts to 21, aligning with sportsbook standards in most US states.
• Strengthen insider trading rules beyond current self-regulation, with centralized monitoring rather than platform-led oversight.
• Establish a league-specific prohibited bettors list, similar to exclusions applied to players, coaches, and team staff under sports betting rules.
• Mandate centralized self-exclusion across all prediction market operators, replacing the current siloed, platform-by-platform tools.
• Require deposit limits, loss controls, activity summaries, and cooldown periods equivalent to those applied to licensed sportsbooks.

The NFL stated that operators cannot be trusted to "police their own markets" on insider access to sensitive information, and argued that the CFTC's proposed self-regulatory framework is insufficient for an industry now processing billions of dollars in monthly sports volume.

Lawyers Warn Operators: Engage With Regulators or Face Legal Heat

Legal experts who track both commodities regulation and gambling law caution that recent courtroom wins may give operators a misleading sense of stability. Braden Perry, a former CFTC senior trial attorney now at Kennyhertz Perry LLC, warns that prediction market platforms "now carry billions in monthly volume on sports outcomes with no equivalent of the surveillance infrastructure that took securities markets decades to build."

Linda Goldstein, a partner at CM Law who advises on advertising and compliance, flagged an additional exposure: the "use of influencers who allegedly are not complying with Federal Trade Commission regulations," a practice she expects to draw intensified scrutiny from the FTC and state attorneys general as the sector grows in public visibility.

Goldstein also named the political risk embedded in CFTC rulemaking: "The CFTC did a complete 180... With a change in the administration, there could be a change in the CFTC's position." Perry added that if the June proposed rule results in a final ban on officiating-call and injury contracts, it could "narrow the business model significantly since sports contracts drive the vast majority of volume."

All legal experts consulted recommended the same strategic posture: engage actively in CFTC rulemaking rather than resist it, build proactive KYC and compliance monitoring ahead of any formal requirement, create formal information-sharing agreements with sports leagues, and diversify contract portfolios away from sports-heavy offerings.

365Prediction Eyes Early 2027 Launch Into a $1 Trillion Market

As the regulatory battles play out, new competitors are positioning for a share of what Dr. Laila Mintas calls a $1 trillion market. Mintas, Founder and CEO of 365Prediction and former CEO of PlayUp, is pursuing CFTC approval for dual licensure as both a Designated Contract Maker (DCM) and a Designated Clearing Organization (DCO). That vertically integrated structure would give 365Prediction control over both market operations and contract settlement, distinguishing it from competitors who launched by partnering with existing licensed infrastructure.

365Prediction is targeting an early 2027 launch, starting with sports-focused contracts and treating political markets as a secondary offering. Mintas positions the exchange model as structurally different from traditional bookmaking, arguing that prediction markets operate without a house edge or the operator conflict of interest inherent in fixed-odds sports betting.

"The last numbers I have seen quoted as a market size are $1 trillion, which is big enough for everybody." - Dr. Laila Mintas, Founder and CEO, 365Prediction, speaking to CasinoBeats.

Mintas's entry adds to a field that already includes Kalshi and Polymarket alongside DraftKings and FanDuel, both of whom have been building prediction market products alongside their existing sportsbook operations.

The Core Legal Question: Federal vs State Authority

The Minnesota ruling is the latest episode in a jurisdictional conflict that has spread across multiple US states through 2026. The central unresolved question is whether CFTC-regulated event contracts qualify as "swaps" under federal commodities law and are therefore protected from state-level gambling bans through the Supremacy Clause.

States including Minnesota have argued that prediction market sports contracts are functionally identical to sports gambling and therefore fall within state police power over gaming. The CFTC and the platforms counter that federal jurisdiction over derivatives and swaps is supreme, making state bans legally invalid.

The Commodity Exchange Act's Special Rule, written into law through the 2010 Dodd-Frank Act, remains the battleground text. Its definition of "gaming" is now being interpreted simultaneously by the courts, Congress, and the executive branch in ways that are in direct conflict. Legal experts describe the resulting uncertainty as unusually complex even by US financial regulation standards, and note that the issue will eventually require resolution at the appellate or Supreme Court level to produce a durable answer.

What Happens Next for US Prediction Market Regulation

The CFTC's June 2026 proposed rules are in a public comment period. The NFL's formal letter represents one of the most prominent voices in American sports pushing for tighter restrictions, and it will carry weight when the CFTC synthesizes comments into a final rule expected later in 2026 or early 2027. Whatever the CFTC finalizes will set the operating parameters for the entire prediction market sector through the next regulatory cycle.

Minnesota's underlying lawsuit will continue toward a merits ruling after the preliminary injunction phase concludes. Other states that passed or seriously considered similar bans will watch that outcome carefully before deciding whether to advance or revise their own legislation.

New entrants such as 365Prediction are calculating that regulatory clarity will eventually arrive under federal CFTC oversight, and that vertically integrated, federally licensed structures built now will confer competitive advantages that outweigh the current legal uncertainty. The race for a $1 trillion market is accelerating even as the framework governing it remains unresolved.

Frequently Asked Questions

What did the Minnesota judge rule on prediction markets?

Judge Katherine Menendez issued a preliminary injunction on July 28, 2026, blocking Minnesota's law that would have banned most prediction market operations from August 1, 2026. She found that Kalshi and Polymarket are likely to succeed in demonstrating that the state law is preempted by federal commodities regulation under the Commodity Exchange Act.

Why is the NFL challenging CFTC prediction market rules?

The NFL argues the CFTC's June 2026 proposed rules do not adequately protect sporting events from manipulation. The league wants specific contract types banned, including referee-call and injury markets, insider trading rules strengthened, and consumer protections equivalent to those required of licensed sportsbooks.

What is 365Prediction and when does it launch?

365Prediction is an event contract exchange founded by Dr. Laila Mintas, former CEO of PlayUp and a long-standing iGaming industry executive. It has applied to the CFTC for Designated Contract Maker and Designated Clearing Organization licenses and plans to launch sports-focused prediction markets in early 2027.

Is a prediction market the same as sports betting?

Legally and structurally, no. Prediction markets operate as peer-to-peer exchanges regulated by the CFTC as commodity contracts. Sports betting is regulated at the state level following the 2018 repeal of the Professional and Amateur Sports Protection Act. Whether the practical user experience differs enough to justify separate regulatory treatment is the heart of the ongoing legal and policy dispute.

What is the CFTC's role in prediction markets?

The CFTC regulates prediction market platforms as futures exchanges under the Commodity Exchange Act. In June 2026, it issued proposed rules clarifying which event contract types are permissible, including most sports outcome contracts, while potentially restricting officiating-call and player-injury markets.

Can US states ban prediction markets?

That question is the subject of active litigation. Minnesota attempted a ban; a federal judge blocked it on federal preemption grounds. The case has not reached a final merits ruling, and other state-level challenges remain pending. Legal experts say the definitive answer will require appellate or Supreme Court resolution of how the Dodd-Frank Act's Special Rule interacts with state gambling authority.