First-In-Nation Minnesota Prediction Market Ban Likely To Trigger Legal Challenges

May 19th, 2026 10:35 AM EDT

Minnesota became the first state to legislatively ban prediction markets, such as Kalshi and Polymarket. The Minnesota Prediction Market Ban marks another chapter in the national fight over sports-event contracts beyond the courtroom and into statehouses.

A sweeping public safety bill signed by Gov. Tim Walz Monday makes it a felony to host or advertise prediction market platforms such as Kalshi and Polymarket in the state.

The bill containing the Minnesota Prediction Market Ban passed both chambers last week with broad bipartisan support as lawmakers rushed to wrap up business ahead of the Legislature’s constitutional adjournment deadline Monday.

The Historic First criminalizes the hosting or promotion of prediction markets tied to athletic events, games of skill, wars, natural disasters, government actions, court proceedings and mass-casualty events. People involved in operating or facilitating those platforms could face felony charges.

"Peak hypocrisy: MN banning prediction markets while its gov't collects millions a year from slot machines, poker games, roulette tables, and casino games. Does anyone believe that casinos are safe and well-regulated, but CFTC-registered exchanges and clearinghouses are not?" posted Kalshi spokesperson Elisabeth Diana on X.

She shared the same statement Tuesday when asked for comment on the ban's enactment.

Legislative Process Skirts Federal Involvement

The move marks a significant escalation in the widening state-versus-federal battle over prediction markets, which operators argue fall under the jurisdiction of the federal Commodity Futures Trading Commission through the Commodity Exchange Act rather than state gambling laws. The CFTC has either joined, filed, or filed Amicus Curiae briefs in multiple cases concerning Designated Contract Markets.

The CFTC will likely get involved here, either by filing, or joining a lawsuit, seeking to have the ban overturned in court.

Unlike other states that have largely pursued cease-and-desist orders, regulatory actions or litigation, Minnesota stands poised to become the first to attempt an outright statutory ban through the legislative process.

Prediction Market Battles Rages Across Nation

The legislation lands amid mounting national scrutiny of prediction markets and sports-event contracts.

States including Ohio, Wisconsin, Nevada, Massachusetts and Arizona have all moved against prediction market operators in recent months through lawsuits, fines, enforcement actions or court challenges.

Ohio regulators recently issued a proposed $5 million fine against Kalshi for allegedly operating unlicensed sports gaming. Wisconsin’s Department of Justice sued Kalshi, Polymarket, Robinhood, Coinbase and Crypto.com over sports-event contracts. Nevada and Massachusetts courts have also weighed challenges involving whether federal commodities law preempts state gambling statutes.

In Arizona, a federal judge temporarily blocked the state from enforcing gambling laws against prediction-market operators, siding — at least preliminarily — with arguments that event contracts may qualify as federally regulated swaps under the Commodity Exchange Act.

Supporters of Minnesota’s bill argue the platforms operate as unregulated sportsbooks while avoiding state licensing requirements, taxes and responsible-gaming safeguards.

Critics warn the measure could trigger costly federal litigation.

Minnesota’s law could become a blueprint for other states seeking to curb prediction markets legislatively rather than waiting for ongoing federal court fights to play out.

First-In-Nation Minnesota Prediction Market Ban Likely To Trigger Legal Challenges

Legislative Process Skirts Federal Involvement

Prediction Market Battles Rages Across Nation

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