Minnesota is moving to ban prediction markets amid nationwide legal battles, targeting trades on sports, elections, and disasters.
Minnesota advances a bill to ban prediction markets, framing them as unregulated gambling and imposing felony penalties for violations. The legislation targets wagering on events including sports, elections, disasters, and life events, restricting operators, payment processors, and advertising.
Multiple states and Congress are pushing to regulate or ban prediction markets, with legal battles expected to continue until the Supreme Court decides. Backers on Tuesday framed the platforms as a form of unregulated gambling that circumvents existing state oversight and law. House File 4437 would prohibit the operation, hosting, and advertising of such markets while imposing felony penalties on violators. The uncontested vote in the House Public Safety Finance and Policy Committee sends the legislation to the chamber’s Commerce Committee, which could vote in the coming days to further advance the bill. A Senate committee is also expected to take similar action on companion legislation shortly.The bill defines prediction markets broadly as systems that allow users to wager on the outcome of future actions, including sports and elections, but also disasters and individual life events. It explicitly targets event contracts tied to outcomes like “war, national or state emergencies, natural or human-made disasters.” Operators, payment processors, and affiliated entities could face criminal liability if they continue facilitating these activities after receiving a cease-and-desist order from the state. The measure also restricts advertising, with explicit provisions around mediums with large underage audiences, and includes a 10-year prohibition on obtaining gaming licenses for those convicted. Sports event contracts have accounted for more than 80% of prediction markets’ volume since they became widely available on platforms such as Kalshi and Polymarket last year. Lawmakers in Minnesota, one of 11 states without regulated sports gambling, are considering separate legislation Minnesota House lawmakers advance a bill out of committee that would prohibit sports, current event-type prediction markets in the state, one of the first state legislatures to advance such a bill; even if passed, it would undoubtedly be challenged in court before implementationTuesday’s testimony included discussions on contracts around geopolitical events such as military strikes, which have drawn increased public scrutiny in recent weeks in the wake of massive trades involving the war in Iran. Speakers during the hearing highlighted concerns that prediction markets function as “an unregulated sportsbook and a way to bet on almost anything,” without safeguards like age limits, anti-money laundering protections, or responsible gaming measures. “What this has amounted to is the explosion of gambling in the last year without the guardrails and the safeguards that states across the country have been putting around gambling for years,” said Rep. Emma Greenman, a bill co-sponsor, in testimony Tuesday.. Policymakers increasingly view these platforms, which claim they operate as financial exchanges, as illegal gambling, raising jurisdictional conflicts between state gaming authorities and federal commodities regulators. Several states have responded with enforcement action, including lawsuits, cease-and-desist orders, or legislative proposals like Minnesota’s. Both traditionally conservative and liberal jurisdictions have expressed concern that prediction markets undermine gaming regulatory structures, which for decades have been almost entirely determined by individual states.against Kalshi, the first time the platform was forced to halt accepting trades from users in a state. Kalshi, like other prediction markets, have vowed to challenge Nevada’s enforcement, along with a growing number of other legal battles. Federal regulators maintain prediction markets are legal and have worked alongside the platforms to protect their operations. Both operators and opponents agree that legal battles will continue for years until determined by the Supreme Court. Meanwhile, states such as Minnesota underscore the rising discontent among gaming regulators and state lawmakers against the platforms, even as their legality remains unsettled. Ryan is a Senior Editor at Covers reporting on gaming industry legislative, regulatory, corporate, and financial news. He has reported on gaming since the Supreme Court struck down the federal sports wagering ban in 2018. Based in Tampa, Ryan graduated from the University of Florida with a major in Journalism and a minor in Sport Management. Before reporting on gaming, Ryan was a sports and political journalist in Florida and Virginia. He covered Vice Presidential nominee Tim Kaine and the rest of the Virginia Congressional delegation during the 2016 election cycle. He also worked as Sports Editor of the Chiefland Citizen and Digital Editor for the Sarasota Observer.Copyright © 1995 - 2026 CS Media Limited All Rights Reserved. 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