MINNEAPOLIS, July 30 -- Tim Walz signed Minnesota's prediction market ban into law in May. On Monday, a federal judge took it off the table three days before it was set to take effect.

U.S. District Judge Katherine Menendez issued a preliminary injunction blocking enforcement of Minnesota's SF 3432, the country's most sweeping attempt to criminalize prediction markets at the state level. The law would have made it a crime to create, operate, host, assist, or advertise platforms like Kalshi and Polymarket inside Minnesota. Under Menendez's order, those platforms stay online in the state while the underlying legal case proceeds to a full merits hearing.

The ruling turns on a question that has split state and federal regulators for eightee...