Lawmakers are closer to banning prediction markets in Minnesota after both chambers of the Legislature took steps to advance legislation setting guardrails.
The Minnesota Senate advanced legislation Thursday on a 56-10 vote making it a felony to host or advertise a prediction market in the state. Hours later, the House of Representatives amended a broader public safety bill to include the provision.
More deliberations remain ahead, and Republican leadership in both chambers opposed the legislation so it’s still possible the ban could stumble ahead of adjournment.
The online markets offer opportunities to stake claims on a broad range of future events. They’ve taken off in popularity and they generate billions of dollars in transactions.
State lawmakers say the sites like Kalshi and Polymarket have bypassed state gambling laws and created some legal gray areas around who can participate. Rep. Emma Greenman, DFL-Minneapolis, advocated for taking action.
“We have seen this explosion just in under a year, you can now bet on almost anything, and all of the regulations and safeguards that Minnesota and states around the country have been putting in for years don’t apply,” Greenman said.
She described it as vital that lawmakers move this year to pass the bill that “prohibits unregulated shadowy prediction markets and preserves our carefully crafted rules and safeguards around what gambling is.”
The proposal wouldn’t subject people who use the sites to criminal penalties. But Greenman and several organizations backing the legislation say they hope it will head off problems. They worry that the sites are too accessible to young people, inviting addiction. Other types of gambling have strict age rules.
Top Republicans argued a ban law would land the state in court. The Commodity Futures Trading Commission has sued other states over regulations for the prediction market sites, contending the federal government has jurisdiction to put up guardrails, not the states. The companies themselves have lodged lawsuits, too.
“If we pass this, we are guaranteed (to be) buying at least one lawsuit, probably multiple lawsuits that the state of Minnesota will have to defend,” said House Republican Leader Harry Niska, R-Ramsey.
Predictions on the sites are not considered bets in the traditional sense because they involve buying or selling contracts among site users. That’s what’s made the markets tough to clamp down on.
Lawmakers have about two weeks to broker remaining compromises on this and other items.
