Minnesota has become the first state in the country to officially ban prediction markets, escalating an increasingly tense national battle over platforms like Kalshi and Polymarket. Gov. Tim Walz has signed legislation that makes it illegal to host, advertise, or support prediction market services in the state.
According to NPR, the new law, which takes effect in August, defines prediction markets as systems allowing users to place wagers on future outcomes involving sports, elections, entertainment, public figures, and world events. The measure also applies to services that help users bypass geographic restrictions, including VPN providers that could allow residents to continue accessing the platforms after the ban takes effect.
Minnesota Rep. Emma Greenman, who introduced the legislation, framed the move as a matter of state oversight and consumer protection. “We as a state should decide how best and what regulations we think should attach to gambling, to protect public safety, to protect our kids,” Greenman said.
The law includes carve-outs for traditional financial hedging products tied to weather and agricultural risks after pushback from farming groups that rely on futures trading to protect crops and harvests.
The crackdown lands at a time when prediction markets have become deeply intertwined with sports culture. Kalshi alone has expanded heavily into sports-related contracts, allowing users to trade on outcomes tied to games, player performances, injuries, and point spreads.
The platform recently brought on LIV Golf star Bryson DeChambeau as an endorsement partner, while Giannis Antetokounmpo joined the company earlier this year as a shareholder and marketing partner.
Minnesota’s action comes months after multiple states began challenging prediction market operators under existing gambling laws. Michigan Attorney General Dana Nessel previously sued Kalshi, arguing the company was offering what amounted to unlicensed sports betting through so-called “event contracts.”
In that lawsuit, Michigan officials claimed Kalshi’s platform was “indistinguishable” from traditional gambling operations because users risk money on uncertain outcomes in exchange for fixed payouts.
Nevada courts also recently ordered Kalshi to pause sports-related trading in the state after a judge found that parts of the platform closely resembled regulated sports wagering.
Federal regulators are now fighting back. The Commodity Futures Trading Commission has filed lawsuits against several states, arguing that prediction markets fall under federal oversight rather than state gambling laws. CFTC Chairman Michael Selig criticized Minnesota’s move, saying the law “turns lawful operators and participants in prediction markets into felons overnight.”
Despite mounting lawsuits and regulatory scrutiny, the industry continues to grow rapidly. Billions of dollars are now traded weekly across prediction market platforms, with sports-related contracts driving much of that activity.
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