Minnesota Prediction Market Ban Passes State Legislature, Would Be First In Nation

By Bill Speros

May 13th, 2026 1:52 PM EDT

Minnesota is on the verge of becoming the first state to legislatively ban prediction markets, such as Kalshi and Polymarket. A 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 headed to Gov. Tim Walz would make it a felony to host or advertise prediction market platforms such as Kalshi and Polymarket in the state.

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

The Historic First would criminalize 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.

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.

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.

“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,” Rep. Emma Greenman, DFL-Minneapolis, told Minnesota Public Radio. “We are joining dozens of other states, red states and blue states, who are trying to both protect the public and protect our markets from the shadowy financial gambling markets.”

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.

“We're going to see no gain for the public,” Rep. Nolan West, R-Blaine, told Minnesota Public Radio. “We're going to see massive losses in our litigation costs related to losing a case against the federal government.”

If signed, 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.

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