Minnesota Moves Forward on Prediction Market Ban, Discusses Legal Betting
Minnesota recently held a Senate Committee on Commerce and Consumer Protection hearing where a bill to ban prediction markets moved toward legislation.
In the hearing, there was also an informal debate on whether the state should legalize sports betting.
The bill to ban prediction markets
The advanced bill, SF 4511, would ban prediction market platforms in Minnesota and make operating one in the state a felony offense. Lawmakers in favor of the bill likened prediction market platforms to gambling entities rather than those involving financial instruments.
Similar to Minnesota's attempted sweepstakes casinos ban, lawmakers at the hearing repeatedly emphasized that the bill would be an outright ban, not state regulation. Senator John Marty stated, “We’re saying no, these are bets, sports bets, bets on politics, things that are currently illegal.”
If the legislation passes, law enforcement would expand its authority. It would be able to issue cease-and-desist orders and level felony charges against prediction market companies. The bill would clear up any uncertainty about the legal status of prediction markets by officially classifying them as illegal gambling. Marty also stated, “We think it’s illegal, cease and desist, and then it’s up to local prosecutors.”
The recent bill in Minnesota is just one of the several cases against prediction market platforms and the Commodity Futures Trading Commission (CFTC), which regulates them. Nevada recently issued a ban on the prediction market Kalshi, while Kalshi and the CFTC won a case allowing the platform to continue operations in New Jersey.
Debating the sports betting issue
Immediately after the committee discussed advancing the prediction market ban, it debated whether the state should legalize and regulate sports betting. While lawmakers presented the sports betting bill, there was no vote.
The Minnesota Department of Public Safety would license and regulate the sports betting industry. At the hearing, other provisions were discussed, including up to 11 licenses for Native American tribes to operate, a sports gaming age limit of 21, and the allocation of taxes on sports betting revenue.
Minnesotans continue wagering through offshore sites
While not the most concrete figures, Cameron Onumah, the Sports Betting Alliance Policy Director, was at the hearing and stated that, according to a 2025 study, Minnesotans wagered between $1.5 billion and $3.8 billion through illegal gambling sites. Those in favor of legalization pointed out that offshore betting platforms take in most bets and lack consumer protection measures.
Also at the hearing was Scott Ward from the law firm Orrick Herrington & Sutcliffe, who represents some of the bigger betting platforms such as DraftKings and FanDuel. He set up a live demonstration to show how simple it is for people in Minnesota to access offshore betting platforms. Using a Minnesota zip code, he registered for an account at the offshore betting site MyBookie with limited age verification.
Proponents of legal sports betting sites voiced concerns about increased problem gambling in the state. Industry representatives countered, showing that addictive gambling rates have stayed stable even in states where sports betting is legal. While the bill to ban prediction market platforms faces an uphill battle, legal sports betting faces an even steeper one, as lawmakers have repeatedly shot down proposals to legalize sports betting in the state.
