Minnesota Sends Prediction Market Ban to Governor, Lawsuits Likely Within 2 Years
Updated
Updated · MPR News · May 13
Minnesota Sends Prediction Market Ban to Governor, Lawsuits Likely Within 2 Years
2 articles · Updated · MPR News · May 13
Minnesota’s anti-prediction market bill has cleared the legislature and is headed to the governor, with legal experts expecting a fast court challenge if it becomes law.
The fight centers on federal preemption: prediction markets are regulated as derivatives by the CFTC, while states argue the contracts now look and function like gambling.
Five states are already being sued by the CFTC over efforts to enforce gaming laws against prediction markets, and the platforms themselves have also sued states.
Lower courts have split on whether states can regulate or block the markets, making a Supreme Court review within the next year or two a plausible next step.
The broader dispute reflects a gap in federal law as event contracts spread from finance into sports and other wagers, increasing pressure on Congress to redraw the line between gambling and derivatives.
As betting and investing merge, will the Supreme Court be forced to draw a new line between them?
Could insider trading on world events turn these new markets into a national security risk?
When a financial tool feels like a casino bet, who should be in charge of protecting consumers?
Minnesota’s Prediction Market Ban: Triggering a $150 Billion Legal and Regulatory Clash
Overview
Minnesota is set to become the first state to ban prediction markets, as a public safety bill containing this measure awaits the governor’s signature after passing the legislature. This move follows earlier uncertainty when a standalone bill failed to advance, but the ban found new momentum by being included in a broader legislative package. The law targets popular online platforms like Kalshi and Polymarket, which let users bet on outcomes of political races, current events, and sports. If signed, Minnesotans will no longer be able to participate in these markets, marking a significant shift in state regulation of online betting.