Minnesota bill would make most bets on prediction markets illegal in the state

Prediction markets allow people to bet on the future outcome of pretty much anything, from the weather to elections to award shows. 

But some Minnesota lawmakers believe the big paydays that can come from buying or selling contracts tied to the outcome of these events amount to an unregulated form of gambling that urgently needs guardrails, which is why legislation that has bipartisan co-authors in both chambers would limit these platforms in the state. 

The proposals — which were discussed in both House and Senate committees on Thursday — would explicitly define prediction markets in state law and say making bets on sports, the weather, court cases, events in popular culture, war or mass casualty events or actions by elected officials and more illegal. 

It would prohibit platforms from advertising their services in the state and would not impact commodity futures in agriculture. The latter is a "loophole" that prediction market platforms are using to their advantage," said Sen. John Marty, DFL-Roseville.

He believes the industry gives way for conduct akin to insider trading. The push to regulate prediction markets in Minnesota comes as a new report Thursday found that earlier this week, new accounts on Polymarket — one of the platforms — made hundreds of thousands of dollars after betting on a U.S.-Iran ceasefire hours before President Donald Trump's announcement.

"A year ago, nobody knew about it. All of a sudden, it's up here, and everybody's talking about it. If we don't regulate it now, a year from now it's going to be through the roof, and all of our existing gambling laws are just really made a joke of," Marty told WCCO in an interview. 

Minnesota stands among a few outliers in the country that have not set up a legal sports betting framework, despite multiple efforts over several years in St. Paul. Marty has long been staunchly against that expansion of gambling and opposition at the state capitol seems to have grown—there hasn't been a committee hearing to advance any proposal to give it the green light this year. 

That makes the odds of passing prediction market restrictions more likely than getting sports gambling over the finish line this year, Marty believes, because lawmakers and key players who differ on that issue are on the same page about prediction markets.  

"We're united in saying, we've got a gambling regulation system in Minnesota. We can't allow somebody with a clever scheme to just say, 'oh, we can ignore your laws and pretend it doesn't exist,'" Marty said. 

There are Republican and DFL co-sponsors on the bills in both chambers. Bipartisan support for any legislation is essential to clear a politically divided Capitol. 

When asked Thursday if the House GOP supports the measure, leaders did not commit, citing legislative deadlines. 

"Those have not met deadlines in the House, and we take those deadlines pretty seriously," said Rep. Harry Niska, the Republican floor leader. 

Other states are trying to crack down on the proliferation of prediction market bets through their own regulations or legal actions against the companies that operate them, like Kalshi and Polymarket. The federal government sued three states last week — Connecticut, Arizona and Illinois — challenging those efforts. 

The Commodity Futures Trading Commission, in court documents, argued that it has the power to regulate the companies, not the states.