Minnesota Just Became The First State To Ban Prediction Markets

Minnesota has become the first state in the country to pass a law outright banning prediction markets, the rapidly growing online platforms that allow users to place bets on virtually any future event, from sports results and election outcomes to weather, live entertainment, and public figures' word choices. Governor Tim Walz signed the legislation into law as part of a broader public safety bill that passed the state House 100 to 32 and the state Senate 57 to 9, a significant bipartisan margin that reflects the depth of concern among lawmakers about the industry's rapid spread into states like Minnesota where sports betting is not yet legal. The new law makes it a felony to host, operate, or advertise a prediction market in the state, and extends the prohibition to services like virtual private networks that could allow residents to access the platforms by disguising their location. It takes effect in August.

Within 24 hours of the bill being signed, the federal Commodity Futures Trading Commission filed a lawsuit in Minnesota district court arguing the state law is a flagrant and unprecedented incursion into federal regulatory authority, since the Trump administration classifies prediction market platforms as financial derivatives rather than gambling, placing them under federal rather than state oversight. The CFTC asked the court to block the law before it takes effect, calling it an overreach that would turn lawful operators and participants into felons overnight. Minnesota's attorney general said his office would respond in court and expressed deep concern about the harms the platforms cause, particularly to young people and lower-income residents. The state's lead legislator on the bill said Minnesota is planting a flag: the decision about what forms of gambling belong in the state should belong to the people and their elected representatives, not to federal agencies or technology companies looking for regulatory gaps to exploit.

Source:https://www.npr.org/2026/05/19/nx-s1-5821265/minnesota-ban-prediction-markets