A bill that would ban sports and election-related prediction markets in Minnesota is making progress in the state legislature.
But a bill that would authorize tribe-led online sports betting? Not so much.
- A Minnesota Senate committee passed a bill that would make operating or advertising certain prediction markets, especially for sports and elections, a felony with possible prison time and fines.
- The legislation aims to clarify legal definitions of betting and give regulators stronger authority, though conflicts with federally regulated prediction markets may end up in court.
- Lawmakers showed concern about rising gambling activity, and a separate effort to legalize online sports betting in Minnesota appears unlikely to advance this year.
Members of the Minnesota Senate’s Commerce and Consumer Protection Committee met on Tuesday and passed SF 4511, which would make it a felony to operate specific kinds of prediction markets in the state.
The bill now heads to the chamber’s Finance Committee for further review. It still needs to pass the whole Senate and then the Minnesota House of Representatives before it can become law.
Nevertheless, the bill proposes to crack down on prediction markets in Minnesota, particularly those offering sports and election-related event contracts for trading. Anyone found guilty of this could face fines and up to five years in jail.
Jon Anglin, director of the Minnesota Department of Public Safety's Alcohol and Gambling Enforcement Division, says they are investigating several prediction markets but are still fact-finding and have made no determinations about legality yet.
— Geoff Zochodne (@GeoffZochodne) April 14, 2026
The bill would also make it a crime to advertise prediction markets in Minnesota. The legislation would take effect Aug. 1 if it becomes law.
“To give practical context, this bill would likely make at least some of the conduct of businesses like Kalshi and Polymarket a felony crime if conducted in Minnesota,” a summary of the bill explains.
Another section of the bill would also clarify that Minnesota's director of alcohol and gambling enforcement could issue cease-and-desist letters and seek court orders against prediction markets.
Let me be clear
The clarifications appear necessary in Minnesota due to lingering legal uncertainty.
As Jon Anglin, director of the Department of Public Safety's Alcohol and Gambling Enforcement Division noted to the committee in a presentation, state law defines a bet as "a bargain mutually agreeing to a gain or loss based on chance."
“A prediction market does fit in with that,” Anglin said.
However, the definition of a bet does not include "bona fide securities or commodities contracts,” Anglin’s presentation explained.
“And some feel that these prediction markets fit within that because of the ‘what are not bets,’” definition, Anglin told the committee.
Anglin added later that his office is investigating "several" prediction market operators but is still in the fact-finding stage and has not yet made a determination about whether they should be treated as gambling.
So, SF 4511 would make it clear what would and would not fly in Minnesota with prediction markets.
“We’re clarifying our law on what’s an illegal bet,” said Democratic-Farmer-Labor Sen. John Marty, one of the bill’s sponsors, during Tuesday’s hearing.
Enjoying Covers content? Add us as a preferred source on your Google account
'Through the roof'
The forbidden categories would include trading of sports-related event contracts, which account for the bulk of trading volume on U.S.-regulated prediction markets.
What’s uncertain at this point is how prediction market operators would respond to Minnesota’s proposed crackdown. The position of federally regulated prediction market operators is that they are, well, federally regulated, and that states can’t curb their activities. Only the federal Commodity Futures Trading Commission can do so, the exchanges argue, which has allowed them to operate in almost all U.S. states.
Further legal clarity for prediction markets, and for state legislatures, will most likely have to come through the court system. Multiple states are challenging the legality of sports event contracts, and the U.S. Supreme Court may ultimately get involved.
In the meantime, though, states are trying to police prediction market activity in their own backyards. And there are concerns among Minnesota lawmakers that a failure to act during this year’s legislative session will mean another year of unchecked growth for prediction markets, as trading volume for the exchanges continues to increase.
“I'm very afraid it's going to go through the roof if we don't do anything this year,” Marty said.
While there appears to be widespread support for cracking down on prediction markets in Minnesota, it looks like there is less support for authorizing a state-level version of online sports betting the the Land of 10,000 Lakes.
Members of the Commerce and Consumer Protection Committee on Tuesday also discussed SF 4139, a bill that would authorize a tribe-run model of mobile sports wagering in Minnesota. No vote on the bill was scheduled.
Not buying it
Comments from senators suggested there is plenty of opposition to legalizing sports betting in the state, particularly due to concerns about increased problem gambling. There are also doubts legalization will stamp out illegal activity.
“When you legalize online gambling, you just get more gambling,” Republican Sen. Jordan Rasmusson said. "You get more problem gambling, and the illegal problems, illegal markets, don't go away.”
Moreover, one of the bill’s sponsors suggested the latest effort to legalize sports betting in Minnesota is already dead legislation walking.
DFL Sen. Nick Frentz thanked the committee for at least considering the bill and noted Wisconsin’s legislature and governor recently approved legislation that provides a path for statewide online wagering via tribes in the neighboring state.
Frentz also said lawmakers had “made a promise” to Minnesota’s Native American tribes that they would not permit any expansion of gambling, but the tribes consider the ongoing wagering happening with offshore, unwanted, and illegal sites to be an expansion. Anglin said they estimate there are now around 3,800 potentially illegal gambling sites available to Minnesotans.
“I realize this bill is not going anywhere this year, but I hope everybody on both sides of the issue will join in having a further conversation,” Frentz said.
