Minnesota Is the Next State Voting to Ban Prediction Markets — What Sports Bettors Need to Know

A bill to ban most prediction market wagers has cleared two Minnesota Senate committees and is now headed for a floor vote in the full chamber. Led by DFL State Senator John Marty of Roseville, the proposal would explicitly categorize bets on sports, weather, court cases, popular culture events, and elections as illegal under Minnesota law. If it passes the Senate and clears the House, it would take effect August 1.

What the Bill Would Actually Do

The Minnesota legislation targets operators, not individual users. Under the bill, prediction market companies could face criminal charges if they accept bets on prohibited events or provide the digital infrastructure — such as odds-setting and administration — for those events. The proposal would remove prediction market operators’ ability to rely on federal commodity futures trading exemptions when offering contracts that go beyond traditional investment instruments. That means sports event contracts, which make up roughly 85 to 88 percent of Kalshi’s current trading volume, would be classified as illegal gambling under state law.

The bill does not apply to regulated casino gaming on tribal lands, horse tracks, or existing charitable games like pull tabs. It also would not affect commodity trading on items like agricultural crops. The legislation has bipartisan support in the Senate, though its path through the House is less certain. A companion House bill has faced questions from Republican leadership about potential litigation exposure — Kalshi and Polymarket have sued multiple states that have moved against them, and Minnesota would likely face similar legal challenges if the bill becomes law.

The Incident That Accelerated the Push

The bill’s timing was not accidental. Days before it cleared committee, DFL State Senator Matt Klein — who is a co-author on the ban bill — drew attention after Kalshi announced its investigations team had found three political candidates nationwide who had used the platform to bet on their own primary races, which violates company rules. Klein, who is running in a Democratic primary for Minnesota’s Second Congressional District, paid a fine and issued a statement saying his experience “points to the need for clearer rules and regulations for these types of markets.”

The incident provided a concrete, local example of the kinds of integrity problems critics have been raising about prediction markets — and it gave the ban bill momentum at exactly the right moment in the legislative calendar. Senator Marty, commenting on the situation, framed prediction markets as platforms that are not in compliance with existing state gambling regulations: “Kalshi now claims it’s the first nationwide legal sports betting app and we would argue it’s not in compliance with our laws.”

Minnesota in a Growing List of States

Minnesota is not operating in a vacuum. As of early 2026, eleven states have issued cease-and-desist orders or initiated enforcement actions against prediction market operators. New York has proposed legislation through Assembly Bill 9251 that would restrict prediction market activity. Tennessee lawmakers have moved bills that would criminalize conduct intended to influence a prediction market outcome. Wisconsin has had ongoing regulatory friction. The landscape for anyone using Kalshi or Polymarket for sports betting is getting complicated.

Minnesota is notable because it is one of eleven states with no legal online or in-person sportsbooks. For residents who have been betting on prediction markets precisely because traditional sports betting is not available, a successful ban would effectively eliminate the primary legal avenue for wagering on games. That is a direct concern for bettors in the state.

The federal CFTC, under Trump-appointed Chair Michael Selig, has been assertive in claiming federal jurisdiction over prediction markets, arguing states cannot override federal commodity exchange law. Kalshi has sued Nevada, New Jersey, Maryland, and other states, with mixed results in early court rulings. The Minnesota bill would inevitably face similar legal challenges, and the Covers publication notes that the ban would take effect August 1 but prediction market operators would almost certainly seek injunctions beforehand.

What to Watch Next

The Minnesota Senate floor vote is the next critical milestone. If the bill passes the full Senate, attention shifts to the House, where the bill’s prospects are murkier given the concerns raised by GOP leadership. Even if both chambers pass the bill, the legal battle that follows would likely take months or years to resolve in court. For Minnesota sports bettors, the immediate practical question is whether the platforms themselves would pull back from the state preemptively or continue operating while litigation plays out — a pattern already seen in several other states where Kalshi has challenged enforcement actions.