Minnesota becomes first state to ban prediction markets

a day ago

Minnesota has become the first U.S. state to ban prediction market sites from operating, with a law making it a crime to host or advertise such markets, effective August.
The Commodity Futures Trading Commission (CFTC) is suing to block the law, arguing federal officials should exclusively regulate the industry, while Minnesota defends its right to regulate gambling for public safety.
Prediction markets like Kalshi and Polymarket, which are regulated by the Trump administration as 'event contracts,' allow betting on diverse outcomes, including sports and elections, and have seen rapid growth despite legal challenges.
The law includes exceptions for weather-related trading used by farmers and for insurance-like contracts, following agricultural industry pushback, with an updated bill expected to pass soon.
Seven other states have introduced bills to crack down on prediction markets, with Hawaii and North Carolina considering statewide bans, highlighting a broader state-federal regulatory conflict.
Legal experts and industry representatives criticize the ban as harmful to competition and innovation, arguing it could drive activity offshore and violate federal frameworks, while states pursue enforcement tactics.
Prediction markets generate significant trading volume, often sports-focused, but face ongoing concerns over insider trading and market manipulation, even as they expand access to betting in prohibited states.

Hasty Briefsbeta