Key Moments:
- Lawmakers sent a bill banning prediction markets to Governor Tim Walz for review.
- The ban sits in Senate File 4760, which passed the House 100-32 and the Senate 57-9.
- If Walz signs it, operators and promoters of prediction markets will face felony charges starting August 1, 2026.
Details of the Legislative Action
Minnesota stands close to passing new regulation as Governor Tim Walz reviews a public safety bill that bans prediction markets. The measure appears in Senate File 4760. If signed, Minnesota would become the first U.S. state to clearly prohibit these platforms.
Lawmakers approved the bill with strong support. The House voted 100-32, and the Senate followed with a 57-9 vote. Earlier, legislators advanced a standalone version of the proposal. However, it stalled in the House. As a result, lawmakers added the language to a broader public safety bill that also targets theft, fraud, and impaired driving.
Implications for Operators and Scope of Enforcement
If enacted, SF 4760 would force prediction market operators to shut down activities tied to sports, politics, entertainment, and other event-based contracts by August 1, 2026. In addition, the law would classify violations as felony offenses.
The law also empowers the state to issue cease-and-desist orders. Operators who receive such orders may request a hearing. However, they must stop operations immediately or face felony charges. The bill, sponsored by Senator Ron Latz, defines prediction markets broadly. It includes any platform that allows users to bet on outcomes outside the control of the contracting parties.
Furthermore, the bill expands its scope to cover contracts linked to chance. This includes securities, commodities, elections, weather, wars, and cultural events. It also targets promotion and advertising of these markets. Therefore, both operators and affiliates could face criminal penalties under the law.
Anticipated Legal Disputes and Regulatory Tensions
Legal challenges will likely follow if Governor Walz signs the bill. The Commodity Futures Trading Commission (CFTC) argues that federal law gives it exclusive authority over prediction markets. As a result, it limits state-level intervention in this area.
Several companies, including Kalshi, Robinhood, and Crypto.com, already face over a dozen lawsuits nationwide. These cases focus on whether state gambling laws apply to federally regulated event contracts. Last week, a federal judge blocked Arizona from enforcing gambling laws against KalshiEX LLC. The court ruled that Congress gave the CFTC sole oversight of swaps and event contracts. With support from the Department of Justice, this ruling signals potential federal preemption challenges for Minnesota’s law.
Legislative Progress Overview
| Legislative Body | Vote Outcome | Bill Reference |
|---|---|---|
| House of Representatives | 100-32 | SF 4760 |
| Senate | 57-9 | SF 4760 |
- Author
Daniel Williams
