Minnesota becomes first state to ban prediction markets

Minnesota Governor Tim Walz signed legislation on April 17, 2026, banning prediction market platforms from operating in the state, the first such law in the U.S. The ban, introduced by Minnesota Rep. Emma Greenman, criminalizes hosting or advertising prediction markets, which allow wagers on outcomes like elections, sports, or entertainment events. It also targets services like VPNs that could help users bypass the restriction, forcing companies like Kalshi and Polymarket to either leave Minnesota or risk felony charges. The law takes effect in August 2026 and includes exceptions for event contracts tied to insurance or securities purchases. Minnesota joins seven other states considering similar bans, with Hawaii and North Carolina having pending legislation. Legal experts warn the rapid growth of prediction markets makes regulation difficult, while industry representatives argue the ban violates existing laws and reduces competition. The crackdown follows over 20 lawsuits challenging state authority over prediction markets, including a Nevada case where Kalshi paused sports betting after a judge ruled it was indistinguishable from regulated gambling. The Commodity Futures Trading Commission (CFTC) has sued five states—including Arizona, Wisconsin, and New York—to assert federal jurisdiction, though critics argue its scope doesn’t cover bets on events like political speeches or celebrity appearances. Kalshi spokeswoman Elisabeth Diana called the ban a ‘blatant violation’ of the law, comparing it to attempting to ban the New York Stock Exchange. Polymarket also criticized the move, stating it conflicts with federal oversight. Legal battles are expected, as states and the CFTC clash over who should regulate the industry, with Minnesota’s law setting a precedent for future enforcement efforts.