What would be the nation’s first codified state-level prediction market ban may not have time to pass this year despite widespread bipartisan support.
- Minnesota’s prediction market ban bill passed the Senate 56-10 but risks stalling before the May 18 legislative adjournment.
- The proposal would make certain prediction market event contracts felony offenses and target operators such as Kalshi and Polymarket.
- The legislation emerges amid escalating nationwide legal battles over whether prediction markets fall under federal or state authority.
The bill, which would explicitly prohibit event contracts on sports competitions and political occurrences, passed the Senate on April 30 with a 56-10 vote. But it has not yet received a committee hearing in the House, jeopardizing its passage.
Minnesota’s legislature is set to adjourn by May 18. Bills typically have to advance through multiple committees before they can be brought to the full floor for a final vote.
With other legislative priorities still pending, Minnesota’s prediction ban effort may run out of time despite lopsided political support.
Bill details
If passed, the bill would allow the state to charge leading companies such as Kalshi and Polymarket with felonies if they accept certain types of event contracts.
Gaming regulators could issue cease-and-desist orders or seek a court order to force the operators from conducting business or advertising in the state. If convicted of a felony, guilty parties could face up to five years in prison, a fine of up to $10,000, or both.
The bill lists out prohibited contracts, including those on sports, wars, elections, assassinations, or pop culture events. It also bans casino-style games, which aren’t offered by major prediction markets.
The legislation does not extend to federally regulated stock trades or commodities exchanges.
Minnesota is one of 11 states without legal in-person or online sportsbooks. Gambling is only permitted at state tribal casinos, while the state oversees two horse tracks, a lottery, and charitable gaming entities.
Ongoing legislative battles
Minnesota’s efforts come as prediction markets have traded billions of dollars worth of event contracts nationwide, with projections estimating most of their revenues coming in states without legal sports betting. A handful of policymaking bodies have considered legislative action, though they face a protracted legal battle should their proposals pass into law.
Kalshi, Coinbase, and other major operators have challenged state gaming regulator enforcement efforts in more than a dozen states. The federal Commodities and Futures Trading Commission, which regulates prediction market sites, has also fought state regulatory efforts.
The CFTC and its regulated companies maintain these platforms are solely subject to federal authority and do not have to adhere to state-level gaming regulators. The operators have long attested in court they are trading platforms akin to the stock market, not a form of gambling.
The push by a growing number of gaming regulators to force out prediction markets, which they consider a form of unlicensed gambling, has led to a nationwide, multifaceted court war that seems destined for the Supreme Court. Efforts by state legislatures like Minnesota’s would likely be paused until the high court rules on their legality.
Still, the Minnesota bill adds to growing concern dominating prediction market news and the broader gaming sector. These platforms have clouded the political and financial future of the multibillion-dollar regulated gaming industry and will likely receive increased attention when lawmakers nationwide convene for their respective 2027 legislative sessions.
