(AsiaGameHub) –   Lawmakers in Minnesota have greenlit a ban on prediction markets, which might mark the first direct state-wide prohibition of this type.

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Good to Know

• The legislation is set to go into effect on August 1.
• Platforms like Kalshi, Robinhood, Crypto.com, and others may encounter new restrictions in Minnesota.
• The Commodity Futures Trading Commission (CFTC) has maintained that states lack the authority to block federally regulated prediction markets.

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Minnesota has now become the focal point of the prediction market debate, as lawmakers included the ban provisions in a broader public safety bill. The House voted 100-32 to approve the package on Tuesday, just hours after the Senate passed it by a 57-9 margin.

The bill now lands on Gov. Tim Walz’s desk. He can either sign it or allow it to become law without his signature. Given the wide margins of approval, legislators probably have sufficient votes to override any veto.

State Gambling Authority Clashes Set to Reach Federal Court

The ban would prevent prediction market operators from accepting trades related to sports, elections, pop culture, and other event contracts within Minnesota. This places the state in conflict with the CFTC, the agency responsible for overseeing federally regulated prediction markets.

The CFTC has already pushed back against state officials who classify prediction markets as illegal gambling. Its stance is unambiguous: federal law grants the agency jurisdiction over these platforms, not state gambling regulators.

Leading operators such as Kalshi, Robinhood, and Crypto.com are already involved in over a dozen legal battles in states that consider their offerings to be gambling. Minnesota may soon enter this legal fray, as the August 1 effective date gives platforms time to file lawsuits before enforcement starts.

The way the ban was passed also sparked criticism. A separate prediction market bill had received widespread bipartisan backing in the Senate, but the House had not scheduled it for a vote. Lawmakers then inserted the ban language into the public safety bill toward the end of the 2026 legislative session.

Rep. Drew Roach criticized both the process and the ban itself, stating:

“I believe this is a major overreach. It’s a disappointing day for Minnesotans and the way we conduct our legislative business.”

Rep. Nolan West also voted against the bill, noting that thousands of residents already use prediction markets and that banning them would merely shift activity to other places.

“Unfortunately, prohibition doesn’t work. If it did, we’d live in a utopia where we could ban all bad things,” West stated. “But when you prohibit something, you just push it into the shadows. That’s exactly what will happen here.”

West also added a warning that Minnesota could end up spending money on a legal case it is unlikely to win.

“This is a terrible idea, mainly because we as a state don’t have the authority to do this,” West said prior to voting against the prediction market ban. “Every state that has tried this is beginning to lose those lawsuits. This will cost the state an unknown amount in legal fees with no real benefit.”

Support for the ban came from Democratic-Farmer-Labor Party Rep. Emma Greenman, who framed the issue as one of state gambling authority. Minnesota permits tribal casinos, two horse racing tracks, a state lottery, and charitable gaming, yet it is still one of 11 states without legalized sports betting.

“This bill is asserting Minnesotans’ right to do what we’ve always done: decide what regulations are best to apply to gambling to protect public safety, our children, and the integrity of gambling itself,” Greenman explained.

For prediction market operators, Minnesota now represents another test case to determine if state gambling laws can apply to event contracts that are regulated at the federal level.