Minnesota Passes First State Prediction Market Ban

Minnesota lawmakers have approved a prediction market ban that could become the first direct state-level prohibition of its kind.

Good to Know

• The bill would take effect Aug. 1.
• Kalshi, Robinhood, Crypto.com, and other platforms could face new limits in Minnesota.
• The CFTC has argued that states cannot block federally regulated prediction markets.

Minnesota now sits at the center of the prediction market fight after lawmakers passed ban language inside a wider public safety bill. The House approved the package 100-32 on Tuesday, hours after the Senate passed it 57-9.

The measure now goes to Gov. Tim Walz. He could sign it or let it become law without a signature. With margins that large, lawmakers likely have enough votes to override a veto.

State Gambling Power Heads Toward Federal Court

The ban would stop prediction market operators from accepting trades tied to sports, elections, pop culture, and other event contracts in Minnesota. That puts the state on a collision course with the Commodity Futures Trading Commission, which oversees federally regulated prediction markets.

The CFTC has already challenged state officials who treat prediction markets as illegal gambling. Its position remains clear: federal law gives the agency authority over those platforms, not state gambling regulators.

Major operators, including Kalshi, Robinhood, and Crypto.com, are already fighting more than a dozen cases in states that view their products as gambling. Minnesota could soon join that legal fight, with the Aug. 1 start date giving platforms time to sue before enforcement begins.

The path to passage also drew complaints. A standalone prediction market bill had passed the Senate with broad bipartisan support, but the House had not scheduled it for a vote. Lawmakers then added the language to the public safety bill near the end of the 2026 session.

Rep. Drew Roach criticized both the process and the ban, saying:

“I think it’s a great overstep. It’s a sad day for Minnesotans and how we’re legislating.”

Rep. Nolan West also voted against the bill, saying thousands of residents already use prediction markets and that prohibition would only send activity elsewhere.

“Unfortunately, prohibition doesn’t work. If prohibition worked, we’d live in a utopia where we’d prohibit all bad things,” West said. “But when you prohibit things, you just move them into the shadows. That’s what will happen here.”

West also chimed in warning that Minnesota may spend money on a case it cannot win.

“This is a very bad idea, chiefly because we do not have the authority as a state to do so,” West said before casting his vote against the prediction market ban. “Every state that does so is starting to lose that litigation. This is going to cost the state who knows how much in legal fees for no actual gain.”

Support came from Democratic-Farmer-Labor Party Rep. Emma Greenman, who framed the ban as a state gambling authority issue. Minnesota allows tribal casinos, two horse tracks, a state lottery, and charitable gaming, but it remains one of 11 states without legal sports betting.

“This (bill) is asserting Minnesotans’ authority to do what we’ve always done, which is to say how best and what regulations we think we should attach to gambling to protect public safety and our kids and the gambling itself,” Greenman said.

For prediction market operators, Minnesota now becomes another test of whether state gambling law can reach event contracts regulated at the federal level.