Minnesota has become the first state in the nation to outlaw prediction markets after Gov. Tim Walz signed a sweeping public safety bill into law Monday. The measure makes it a felony to host, operate, manage or advertise platforms like Kalshi and Polymarket, which allow users to place wagers on future events ranging from elections and sports outcomes to weather and world affairs.
The ban, tucked into Senate File 4760, passed with strong bipartisan support — 100-32 in the House and 57-9 in the Senate. It takes effect August 1 and includes an exception for certain weather-related contracts following concerns from the agricultural industry. Proponents argued the platforms skirt state gambling laws and pose risks to public safety, especially for younger users.
The law immediately drew a federal challenge. On Tuesday, the Commodity Futures Trading Commission and Justice Department filed suit in federal court seeking to block enforcement, arguing that prediction markets fall under federal jurisdiction and that the Minnesota ban unlawfully criminalizes lawful activity. CFTC officials described the move as an overreach that could harm farmers and innovators who use these tools for hedging.
The development highlights growing tension between states seeking to regulate emerging betting platforms and federal regulators. Minnesota’s action comes as prediction markets have exploded in popularity nationwide, with millions of users betting on everything from political races to entertainment outcomes. No immediate impact on users outside Minnesota is expected until the legal questions are resolved.
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