Is Kalshi legal in Minnesota?

The law is article 6 of chapter 118 of Minnesota's 2026 session laws, Senate File 3432, which the governor signed on May 26, 2026 (session law). It adds a new section, Minn. Stat. § 609.7615, to the state's criminal code.

The section defines a prediction market by what a contract is about. Nine subjects are covered: athletic events and games of skill, including individual statistics; games played with cards, dice or machines; war, emergencies, disasters, mass shootings, terrorism and public health crises; events that happen to a person or a group; elections and certain specific government decisions; lawsuits, trials, pleas and settlements; deaths, assassinations and mass casualty events; popular culture, such as awards and release dates; and whether a person will make a particular statement (subd. 1(e)). It calls each such contract a "wager" (subd. 1(f)).

Anyone who, "for consideration and as part of a business," creates a prediction market, runs the platform, lists the events, holds the money, acts as counterparty, or sets the prices or settles the trades "is guilty of a felony" (subd. 2). The same applies to anyone who knowingly supplies event outcomes to a prediction market, or helps it identify where its customers are or move their money. A separate subdivision makes it a felony to advertise or market "financial or technological products that promote transactions prohibited under this section" (subd. 3); that subdivision does not repeat subdivision 2's "for consideration and as part of a business" condition. Subdivision 4 exempts from subdivision 2, not subdivision 3, activities that are not bets under Minn. Stat. § 609.75, subd. 3, and contracts authorized and regulated under chapters 59A to 79A. The section takes effect August 1, 2026, for crimes committed on or after that date.

The same article changed two older laws. It extends the cease-and-desist and injunction powers in chapter 299L, the state's gambling enforcement chapter, to violations of the new section (sec. 1). And it rewrites the line in Minn. Stat. § 609.75 that says futures contracts are not bets, adding "except as provided in section 609.7615" (sec. 2).

KalshiEX LLC filed its complaint on May 27, 2026, the day after the law was signed, in the U.S. District Court for the District of Minnesota (No. 26-cv-2778). It named Attorney General Keith Ellison, Governor Tim Walz and Jon Anglin, director of the Alcohol and Gambling Enforcement Division (p.1). Kalshi told the court that once the law took effect it "will be deemed a felon in Minnesota for offering certain event contracts on its federally authorized DCM" (p.2, ¶2), meaning its CFTC-designated exchange.

The complaint has two counts. The first says the Commodity Exchange Act preempts the law under the Supremacy Clause, because Congress gave the CFTC "exclusive jurisdiction" over contracts traded on a designated exchange (pp.1, 28). The second says the advertising ban violates the First Amendment (p.33). Kalshi asked for more than relief from the new section: an injunction against enforcing Minn. Stat. §§ 609.75 et seq., the state's general gambling laws, "or any other Minnesota law that attempts to effectively regulate Plaintiff's exchange" (p.35).

Two other suits were filed within days. Kalshi's complaint cites the federal government's own case, United States v. Minnesota, No. 26-cv-2661, filed May 19 (p.2, ¶2), and Polymarket US, run by QCX LLC, sued as No. 26-cv-2841. The court heard all three together. In its filings Kalshi said it had more than 90,000 verified users in Minnesota as of May 26, 2026, with "millions of dollars' worth of open positions" not yet settled (order p.40 n.29).

Judge Katherine Menendez decided the three motions in a single order, dated and filed July 27, 2026 (ECF 51), and the clerk entered a judgment the same day (ECF 52). The motions of the CFTC, Kalshi and Polymarket US are "GRANTED," and "Until a final decision on the merits is reached in these cases, Defendants are enjoined from enforcing Minn. Stat. § 609.7615, as amended and adopted by SF 3432, against entities that are registered as designated contract markets by the CFTC" (p.44). The injunction is in force; we found no order staying, narrowing or lifting it.

The judge granted it on one ground: the plaintiffs are likely to succeed "at least in part" on express preemption (p.3), because the Act gives the CFTC exclusive jurisdiction over swaps traded on a registered exchange (p.24). She did not decide implied preemption or the First Amendment claims (p.38).

The order is cautious about Kalshi's own listings. The judge wrote that the plaintiffs "have not shown that every event contract listed on Kalshi and Polymarket US fits the statutory definition of a 'swap'" and that "any permanent injunctive relief may be much narrower" (p.23). Her two examples were Kalshi markets: who will win season eight of Love Island USA, and what announcers will say during World Cup broadcasts. For those she found it hard to see any financial, economic or commercial consequence (p.35). At the hearing, Kalshi's counsel argued that whether a contract is a swap is for the CFTC to decide, not the court; the judge said that argument was not developed in the briefs and expressed no opinion on it (p.36 n.26).

The order does not answer that. Its operative paragraph names only § 609.7615 (p.44), although Kalshi's complaint asked to stop the older gambling laws as well (p.35). The judge drew the line herself: "This case does not concern any effort by Minnesota to apply its existing sports-betting laws to Kalshi or Polymarket US. Instead, Minnesota's prediction market statute applies to far more than sports-related event contracts" (p.24 n.17).

The same footnote notes that the Sixth Circuit had questioned whether the Act's exclusive-jurisdiction clause expressly preempts a state's ban on unlicensed sports betting. We found no Minnesota action against Kalshi under its existing gambling laws in the filings and news we read.

No order or filing we read addresses Minnesota accounts, deposits, withdrawals or open positions. The injunction is directed at state officials and tells Kalshi nothing about its customers.

What the order records is the alternative Kalshi described. Without an injunction, the judge wrote, the exchanges would either keep serving Minnesota users and "face potential felony charges" or "take steps to exit the market for their trades in Minnesota" (p.39), and "the DCMs would cancel Minnesota users' trades" (p.40). The injunction was entered July 27, five days before the law took effect.

The case has moved to discovery. After a pretrial conference on October 15, Magistrate Judge David T. Schultz ordered Minnesota to file a discovery plan by October 29, 2026, naming the issues of fact it wants to explore, "for example, whether an event contract is a swap" (Doc. 93 in No. 26-cv-2661, p.1). The plaintiffs' objections are due November 12. The court will then issue a scheduling order "regarding the scope and timing of discovery, if any" (p.2).

The injunction is preliminary: "not a final determination of the merits" (p.44). The order states both outcomes. If the plaintiffs prevail, it "would simply have prevented enforcement of a state law that is preempted"; if Minnesota prevails, "the preliminary injunction will no longer be effective, and Defendants can begin enforcing the prediction market statute against those who violate it" (p.42). We could not determine whether the July 27 order was appealed: the court's docket was not readable to us, and the filings we read do not mention an appeal.

The United States and the CFTC are plaintiffs in their own case, and the CFTC's motion was one of the three granted. It argues, with Kalshi and Polymarket US, that the Act preempts the law because it gives the CFTC exclusive jurisdiction (p.3). It told the court it is challenging the statute on its face, and agreed it must show the law is invalid in all its applications (p.37 n.27). At the hearing, asked how often the CFTC had sought to take down a contract in the last 18 months, its counsel said he did not believe it had for event contracts, and that it had not acted to stay Kalshi's and Polymarket US's contracts because, in the agency's view, "they do comply with the CEA" (p.15).

Minnesota's position is set out in the same order. Its lawmakers were concerned that many event contracts "were indistinguishable from gambling," with risks of manipulation and problem gambling, "particularly for young people" (p.10). The state argued that swaps should cover only event contracts "tied to some commodity," along with two arguments from canons of statutory construction (p.29), and it did not disavow enforcing the law once it took effect (p.39). The judge wrote that "there may be strong arguments that ultimately weigh against a conclusion that the CEA expressly preempts the statute" (p.34), and still found the plaintiffs likely to succeed for now.

Polymarket US is the third plaintiff and is covered by the same injunction: is Polymarket legal in Minnesota?. The order notes that courts elsewhere have split on implied preemption, comparing the Third Circuit's ruling for Kalshi in New Jersey, KalshiEX v. Flaherty, with KalshiEX v. Martin, a ruling against Kalshi on sports contracts (pp.37-38). The order identifies Flaherty as a Third Circuit decision (p.14) and Martin as a decision of the federal court in Maryland (pp.4-5).

Petitions asking the Supreme Court to decide the preemption question are followed on Kalshi at the Supreme Court, and is Kalshi gambling? sets out both sides.

The injunction protects "entities that are registered as designated contract markets by the CFTC" (p.44). It does not name brokers, and we could not determine from the order how it applies to a broker that offers Kalshi's contracts. Subdivision 2 of the statute reaches a person who, for consideration and as part of a business, knowingly provides services that transfer funds or process payments so consumers can make or settle wagers. Subdivision 3 separately reaches "whoever advertises or markets financial or technological products that promote transactions prohibited under this section." We found no Minnesota action against a broker.

Nothing in the case addresses federal tax, and a state court fight over a criminal statute isn't a ruling on federal income tax. Gains and losses on past trades are reported on a federal return; how Realize rebuilds them from Kalshi's data is in how to file Kalshi taxes. Every other state's status is on the Kalshi legal page.