Minnesota’s attempt to ban prediction markets has been temporarily halted after a federal judge issued a preliminary injunction blocking enforcement of the law against federally regulated exchanges.

The decision came just days before the measure was scheduled to take effect and follows legal challenges from the Justice Department, the CFTC, Kalshi and Polymarket US.

Judge Katherine Menendez concluded that the plaintiffs had shown a likelihood of success on arguments that the ban is preempted by federal law, which gives the CFTC authority over designated contract markets.

The court also agreed that allowing the law to take effect could cause irreparable harm to the companies, including disrupting nationally regulated prediction markets.

The injunction temporarily bars the state from enforcing the law against CFTC-designated contract markets while the case proceeds, though the judge noted the statute may still be valid in some applications.

Minnesota has defended the measure by arguing prediction markets constitute gambling, joining several other states that have attempted to restrict or prohibit the platforms.