Photo Credit: iStock/ Hirug
(ST. PAUL, MN) - Governor Tim Walz signed legislation May 18, banning all prediction market platforms, making Minnesota the first state to do so. Under the new legislation, it will be a criminal offense to host, advertise, or support prediction market platforms, with violations potentially resulting in felony charges.
The law goes into effect in August, and covers betting for sports, elections, public and world events, and more. Kalshi, Polymarket, OG, and Robinhood Predicts are just some of the betting platforms expected to feel the impact. Exceptions do exist for securities and commodities trading, weather trading products vital to farmers, and insurance-related event contracts.
Walz and other Minnesota lawmakers believe control of gambling regulations should rest with the state, allowing it to better protect minors and consumers, but the Federal Government disagrees. On May 19, the Commodities Future Trading Commission (CFTC) argued the new legislation usurped federal authority and sued to block it.
Photo Credit: Kristin Hassel / Kalshi, Polymarket, OG, and Robinhood Predictions
While Minnesota is the first state to place an overall ban on prediction market platforms, seven other states have already drafted anti-prediction market bills and there are 20+ pre-existing lawsuits regarding the lack of concrete regulations for these types of betting platforms. Concerns have surrounded the industry for some time, many opposed to prediction markets claim the betting venues create a risk of insider trading and manipulation of real-world events (e.g., throwing fights or games).
Online sports betting is illegal in Minnesota, but the introduction of prediction market platforms gave an opening for similar activity under the guise of event contracts, which are allowed according to current federal regulations.
To add to or correct any information in this report, please contact me at kristin.h@lead4earth.org. You can also leave a comment below.
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