Minnesota becomes first state to ban prediction markets

Minnesota becomes first state to ban prediction markets

toggle caption Steve Karnowski/Associated Press

Minnesota Gov. Tim Walz has signed the nation's first law banning prediction market sites from operating in the state, and in response, the Trump administration has sued, teeing up a legal battle over the most far-reaching crackdown on popular services like Kalshi and Polymarket.

It comes as states confront a growing standoff with the Trump administration over how to regulate the industry, which allows people to bet on virtually anything.

The new state law makes it a crime to host or advertise a prediction market, which it defines as a system that lets consumers place a wager on a future outcome, like sports, elections, live entertainment, someone's word choice and world affairs.

The prohibition extends to services supporting prediction markets, like virtual private networks, that could allow consumers to disguise their location and get around the ban.

It would force prediction market sites like Kalshi and Polymarket to leave the state, or face possible felony charges. The law takes effect in August.

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"We as a state should decide how best and what regulations we think should attach to gambling, to protect public safety, to protect our kids," said Minnesota Rep. Emma Greenman, the Democrat who introduced the measure.

The law has a carve-out for event contracts that serve as an insurance policy in the event of "harm, or loss sustained" and for the purchase of securities and other commodities.

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