Minnesota Law Bans Prediction Markets and Criminalizes Participation

Minnesota became the first state to enact an outright ban on prediction markets. The law classifies the creation, control, operation, support, or advertisement of these platforms as a felony. The ban covers markets tied to sporting events, casino games, elections, disasters, and death.

Lawmakers removed a provision that would have included weather events after determining it could affect farmers hedging against price changes.

Federal Response The U.S.

Commodity Futures Trading Commission filed for a preliminary injunction in U.S. District Court for the District of Minnesota. The agency argues that federal law gives it exclusive jurisdiction over these markets. The CFTC has taken similar positions in other states that attempted to restrict prediction markets.

Officials at the agency stated that the Minnesota law turns lawful operators and participants into felons.

A Kalshi spokesperson said the law is unconstitutional and would push consumers toward unregulated offshore platforms. A Polymarket spokesperson stated that the ban conflicts with the federal regulatory framework. The law does not identify a specific victim. Under state sentencing guidelines, violations can result in probation, up to one year in jail, or other non-jail sanctions.