Minnesota becomes first state to ban prediction markets

Minnesota Gov. Tim Walz signed a law that bans prediction market sites from operating in the state. The law makes it a crime to host or advertise a prediction market, defining it as a system where consumers wager on future outcomes such as sports, elections, weather, live entertainment, word choice, and world affairs. The prohibition also covers services that support prediction markets, including virtual private networks that could disguise location and bypass the ban. Prediction market platforms like Kalshi and Polymarket must leave Minnesota or face possible felony charges. The law takes effect in August and includes carve-outs for event contracts used as insurance for “harm, or loss sustained” and for purchases of securities and other commodities.

"Minnesota Gov. Tim Walz has signed the nation's first law banning prediction market sites from operating in the state, the most far-reaching crackdown on massively 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, weather, 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. "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. Besides Minnesota, bills cracking down on the prediction market industry have been introduced in seven other states, according to the National Conference of State Legislators. Two of those states, Hawaii and North Carolina, have pending bills seeking to ban the industry statewide."

"Experts say the cloud of legal uncertainty hanging over prediction markets apps have not slowed their rapid growth. "The states are using any tactic they can to go after the prediction market companies," said Melinda Roth, a professor at Washington and Lee University's School of Law, who studies the industry. "But they've embarked"

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