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Kalshi and Polymarket can continue operating in Minnesota after securing a temporary court order that blocks the state from enforcing its prediction market ban. The dispute could shape how states regulate event contracts tied to sports, politics, macroeconomic trends, and cryptocurrencies.
Prediction markets let users trade contracts linked to future events. Contract prices reflect the market’s estimated probability of an outcome, according to Pew Research Center. Crypto contracts now form a major part of the sector. Pew estimates they represent about 20% of Polymarket’s volume and roughly 7% of Kalshi’s volume since July 2024.
The Minnesota case reaches beyond two trading platforms because Polymarket settles on-chain margin through stablecoins. Both companies also handle substantial cryptocurrency-related activity. Polymarket has moved toward more advanced crypto infrastructure through its high-performance central limit order book, known as CLOB v2. It also launched pUSD, a new USDC-backed token.
As a result, the court order preserves access to a large pool of crypto-native activity in Minnesota. It also keeps the broader legal dispute active.
How far can states go when federally regulated prediction exchanges increasingly combine event contracts with blockchain settlement?
Artemis data shows monthly prediction market volume stayed between $25 billion and $30 billion during the first five months of 2026. Volume then reached a record $52.8 billion in June. July month-to-date volume climbed to $50.9 billion. Activity remained high after the FIFA World Cup, one of the year’s largest trading events.
Sports, macroeconomic expectations, central bank activity, and crypto market developments have driven this year’s expansion. Political events had played a larger role in earlier years.
Galaxy Research estimates that lifetime prediction market volume has exceeded $150 billion. Bernstein analysts cited by Galaxy said the market could reach $1 trillion by 2030 if regulation improves.
Token Terminal data gives Kalshi 61.1% of cumulative prediction market notional volume over the past five years. Kalshi recorded $159.5 billion, compared with Polymarket’s $101.7 billion. Kalshi also generated $39.5 billion in notional volume during the last 30 days. Polymarket recorded $8.7 billion during the same period.
Their regulatory structures differ. Kalshi operates as a Commodity Futures Trading Commission-regulated Designated Contract Market, while Polymarket’s international platform lacks CFTC oversight.
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Galaxy estimates Polymarket’s US operations produced about $1.3 billion in April volume. Its international platform generated about $9 billion during the same month. Polymarket is pursuing broader US regulatory approval for its flagship platform. This effort could affect how the company expands under federal derivatives rules.
The Minnesota order remains temporary. Courts have not settled whether states can restrict federally regulated prediction exchanges through gambling laws. Minnesota’s next move, similar actions from other states, and Polymarket’s regulatory expansion will shape market access. The dispute may also affect institutional views of blockchain-based financial infrastructure.
The Minnesota order keeps Kalshi and Polymarket operating while courts examine whether federal derivatives rules can override state gambling restrictions. The decision could affect prediction markets, stablecoin settlement and broader crypto access. Traders should watch Minnesota’s next filing and similar actions from other states.
