United States v. State of Minnesota
Case Overview
The United States and the Commodity Futures Trading Commission sued the State of Minnesota. One of three consolidated challenges in the District of Minnesota to Minn. Stat. 609.7615, the state law banning sports-event and other prediction-market contracts, which takes effect August 1, 2026. On July 27, 2026 Judge Katherine M. Menendez granted a preliminary injunction in all three cases in a single 44-page opinion (Dkt. 76), barring enforcement of the statute as to CFTC-registered designated contract markets. The court ruled on express preemption alone under the Commodity Exchange Act's exclusive-jurisdiction provision, 7 U.S.C. 2(a)(1)(A), and expressly reserved the implied-preemption and First Amendment theories. The injunction is not facial: the court said the statute may not be preempted in all of its applications.
The Facts
Minnesota enacted Minn. Stat. 609.7615, as amended and adopted by SF 3432, banning prediction-market contracts on sporting events and other outcomes, effective August 1, 2026. Three suits followed in the District of Minnesota: one by the United States and the Commodity Futures Trading Commission, one by the exchange KalshiEX, and one by QCX, which does business as Polymarket US. Judge Katherine M. Menendez heard them together.
The Application
The court found the plaintiffs likely to succeed on express preemption and rested on that ground alone, expressly reserving the implied-preemption and First Amendment theories. It followed the Third Circuit's reasoning in KalshiEX LLC v. Flaherty, 172 F.4th 220 (3d Cir. 2026), and addressed contrary authority rather than ignoring it, distinguishing Martin and noting that the Sixth Circuit in Schuler had questioned this same statutory hook. The court declined to require security, citing cases holding that a bond is not needed where the challenged law is likely preempted.
The Conclusion
Preliminary injunction granted in all three cases on July 27, 2026. Minnesota is enjoined from enforcing Minn. Stat. 609.7615 against entities registered with the CFTC as designated contract markets until a final decision on the merits. The ruling is deliberately not facial: the court said the statute may not be preempted in all of its applications, and that this is no final determination of the merits.
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