Minnesota becomes first state to ban prediction markets
The federal regulator says the ban could block weather hedges used by farmers and has asked a court to stop enforcement.
- On Tuesday, Governor Tim Walz signed legislation making Minnesota the first state to criminalize prediction markets like Kalshi and Polymarket, with the law taking effect August 1, 2026.
- Concerns over insider trading intensified after state Sen. Matt Klein wagered $50 on his own primary through Kalshi, leading to a $539.85 fine and five-year suspension in April before he co-authored the ban.
- Legislative support proved strong with House passage of 100-32 and Senate approval of 56-10, though CFTC Chairman Michael Selig argued the law 'turns lawful operators and participants into felons overnight' and threatens Minnesota farmers who rely on weather contracts to hedge crop losses.
- Federal regulators described Minnesota's law as the most aggressive state action to date, filing suit in district court arguing it is a 'flagrant and unprecedented incursion' into CFTC authority, while Kalshi spokeswoman Elisabeth Diana warned the ban would drive users to 'unregulated offshore markets.'
- Seven additional states have introduced similar bans, with Hawaii and North Carolina pursuing statewide prohibitions, while more than 20 lawsuits nationwide wrestle with whether prediction markets constitute gambling or legitimate financial instruments.
46 Articles
46 Articles
Minnesota law banning prediction markets creates victimless crime
Last October, Minnesota state Sen. Matt Klein (D–Mendota Heights) wagered $50 on the prediction market Kalshi that he would win his congressional primary this August. After Kalshi flagged the bet, Klein was fined $539.85 and received a five-year suspension from the platform in April. While he tried to frame his experience as similar to that of "many other Minnesotans," there should have been no ambiguity to Klein that his actions ran afoul of K…
Minnesota is the first state in the US to crack down on gambling on future events via websites like Polymarket and Kalshi. A new law prohibits these sites from operating in the state starting in August. Remarkably, it is not Polymarket and Kalshi that are appealing, but the Trump administration that is objecting to the law.
Trump administration sues Minnesota over prediction market ban
The Trump administration sued Minnesota on Tuesday over its new prediction market ban, contending it’s preempted by federal law. Minnesota Gov. Tim Walz (D) signed the bill earlier this week, making it a felony to operate or advertise a prediction market in the state. It’s set to take effect Aug. 1. “Minnesota’s attempt to criminalize derivatives contracts is precisely what Congress…
Minnesota bans prediction markets
Minnesota became the first US state to ban prediction markets, in a move that widens the row over the platforms. The White House is suing to overturn the ban. The markets were launched with high-minded ambitions of using the wisdom of the crowd to forecast future events, and help business leaders and politicians make better decisions. But they have been hit by insider-trading scandals, notably involving US military action in Venezuela and Iran. …
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