Minnesota bans prediction markets, faces possible CFTC suit

The Minnesota Legislature approved SF 4760, an omnibus public safety bill that creates a new state statute titled “Prediction Markets” and outlaws certain event-based wagering. The bill returned to both chambers after a conference committee compromise and was passed by the Senate 57-9 and the House 100-32.

The law defines a prediction market as a system that allows consumers to place a wager on the future outcome of a specified event that is not determined or affected by the performance of the parties to the contract. The definition includes wagers tied to athletic events and esports, elections and government actions, legal proceedings, weather events, public health crises, wars and national emergencies, assassinations and mass casualty events, popular culture outcomes and whether a person will make a particular statement.

Under SF 4760, a person commits a felony if, for consideration and as part of a business, they create a prediction market, operate or manage a platform used for prediction wagering, or intentionally facilitate prediction market activity. The prohibition covers entities that provide geolocation services, payment processing, money transfers, event data and verification services, and other supporting services. The bill also criminalizes advertisement and promotion of prediction markets and gives regulators authority to issue cease-and-desist orders and seek injunctions for violations. Those provisions take effect Aug. 1, 2026.

Supporters told lawmakers the language was intended to close legal gaps and address platforms operating in what they described as a gray area. The bill also amends Minnesota gambling law to clarify that commodity and securities contracts are exempt from gambling statutes “except as provided in section 609.7615,” the newly created prediction market prohibition.

Minnesota could be drawn into existing litigation over event-based contracts. The Commodity Futures Trading Commission has sued several states after those states pursued enforcement actions against prediction market operators, asserting federal jurisdiction over such contracts. Some operators, including Kalshi, have filed suits challenging state efforts to block event contracts. During floor debate, Senate Minority Leader Mark Johnson warned a lawsuit was “almost a guarantee.”

Separately, the Senate passed SF 4474, a bill aimed at sweepstakes casinos and their dual-currency systems. That measure has not advanced in the House and remains in the Public Safety Finance and Policy Committee. The 2026 legislative session is scheduled to adjourn on May 18, and SF 4474 has not reached final passage.