Minnesota Enacts First Statewide Felony Ban on Prediction Markets

Minnesota enacted the nation's first law making it a felony to host, create, or advertise prediction markets, with the statute scheduled to take effect August 1. The measure also covers anyone providing supportive services or real-time data to the platforms, a provision that could extend liability to sports leagues, news organizations, and financial institutions.

The Trump administration filed suit less than 24 hours after the law was signed, arguing that the statute converts lawful operators and participants into felons overnight. The complaint contends that the broad language could expose entities that supply data feeds or other services to the platforms.

State officials stated that prediction markets are designed to be addictive and disproportionately affect young people and low-income residents. They added that the platforms help the ultra-rich accumulate wealth while leaving others worse off. The law does not impose penalties on individual bettors.

Dozens of other states have pursued legal or regulatory steps against the industry, but Minnesota is the first to enact a felony prohibition on company operations.