Minnesota Senate passes prediction market ban with broad bipartisan support
The Minnesota Senate on Thursday overwhelmingly passed a bill to ban most bets placed on prediction markets like Kalshi and Polymarket.
The legislation, which passed 56-10, makes wagers on topics like sports, weather, events in popular culture, war and death explicitly illegal.
Proponents of the bill, like Sen. John Marty, a Democrat representing Roseville, say the platforms give way to an unregulated form of gambling and could entice people into behavior that is comparable to insider trading.
He said the strong bipartisan support underscores that Minnesotans are concerned about the proliferation of bets on these platforms.
"It shows that people of both parties, people who are pro-gambling and anti-gambling together, can recognize that the prediction markets are ripe for conflict of interest, things from insider trading for politicians, for others. It's a huge thing ripe for scandal. And it's gone out of control," Marty told WCCO.
The vote comes a week after a political dust-up over prediction markets hit close to home. DFL state Sen. Matt Klein, who is running to represent Minnesota's 2nd Congressional District, came under fire after an investigative team at Kalshi found he had put money on himself to win the primary election.
Klein admitted to it and said that though he had never bet before, he was curious and placed a $50 wager. Kalshi has since suspended him from the platform for five years. He said his experience "points to the need for clearer rules and regulations on these types of markets," and he supported the bill that passed on Thursday.
A similar measure was introduced in the tied Minnesota House, but its future is uncertain after GOP leadership noted that it could lead to lawsuits from the federal government.
"I'm concerned about the sort of legal status of that. How do we do that with federal commodities laws, which apparently the [U.S. Commodity Futures Trading Commission] thinks that they have exclusive jurisdiction over prediction markets," Rep. Harry Niska, the Republican floor leader, said last week.
Earlier this month, the federal government sued Illinois, Connecticut and Arizona over their efforts to regulate prediction market operators.
Marty is still hopeful of its chances in the House before session ends May 18.
Separately, on Thursday, the Senate nearly unanimously passed a bill to regulate online sweepstakes, casino-style games that supporters believe have also been operating in a legal loophole to skirt the state's gambling regulations.