Bill to ban prediction markets ready for Minnesota Senate floor vote after lawmaker fined for betting on his own race
A bill to ban most bets on prediction markets is ready for a Minnesota Senate floor vote just days after a lawmaker sparked controversy by putting money on his own primary race for Congress.
The proposal that cleared a key Senate committee Friday would explicitly say bets on topics like the weather, court cases, events in popular culture, the outcome of an election and more are illegal under Minnesota law. Supporters of a ban believe the platforms like Kalshi and Polymarket are skirting the state's 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," said Sen. John Marty, DFL-Roseville, the lead sponsor of the legislation.
Kalshi earlier this week said that its investigations team found three political candidates nationwide had used the platform to place a bet on their own race, which is against company rules. Among them was DFL state Sen. Matt Klein, who is running in the Democratic primary for Minnesota's 2nd Congressional District.
Klein admitted to doing it and paid a fine in a settlement, which also included a five-year suspension from using the platform. In a statement, he said he was curious how it worked and that the $50 bet was a mistake and apologized. He's the coauthor on Marty's bill.
"My experience, like many other Minnesotans, points to the need for clearer rules and regulations for these types of markets," Klein told WCCO in a statement.
There's a similar bill in the tied House, but its future is uncertain after GOP leadership raised questions on Thursday and worried it could be tied up in litigation.
"I'm concerned about the sort of legal status of that. How do we do that with federal commodities laws, which apparently the CFTC [U.S. Commodity Futures Trading Commission] thinks that they have exclusive jurisdiction over prediction markets," said Rep. Harry Niska, the Republican floor leader.
The federal government sued three states earlier this month — Connecticut, Arizona and Illinois — challenging their efforts to crack down on the proliferation of prediction market bets.
But top Minnesota House Democrats told reporters they believe Klein's bet illustrates the larger problems with prediction markets and voiced their support.
"[DFL] Rep. Greenman has been advancing legislation all session to ban these markets, which really have come on very quickly and have a lot of bad consequences, as we saw yesterday," said Rep. Zack Stephenson, the DFL leader of the caucus.
