Minnesota becomes the first state to enact a law targeting prediction market sites such as Kalshi and Polymarket. Reporting from multiple outlets says Gov. Tim Walz signs the measure, which takes effect in August and makes it a crime for businesses to host or advertise “prediction markets,” defined broadly as systems that let people wager on future outcomes, including topics like sports, elections, entertainment, word choices, and world events. The law also extends to services that could be used to evade the ban, including virtual private networks that help users obscure their location.
The bill includes limited carve-outs. It allows certain arrangements framed as insurance for “harm, or loss sustained,” and it permits trading involving securities and other commodities. Separately, an updated approach is described as allowing weather- and crop-related event trading, following pushback from agricultural interests that rely on such products to hedge risk.
At the federal level, the Commodity Futures Trading Commission challenges the law in court, arguing prediction markets should be regulated exclusively by federal authorities. The CFTC seeks to block the Minnesota ban before it begins, setting up an early legal dispute over the state’s authority and the industry’s regulatory treatment.
