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Minnesota Becomes First State To Ban Prediction Markets (npr.org) 99

An anonymous reader quotes a report from NPR: Minnesota Gov. Tim Walz has signed the nation's first law banning prediction market sites from operating in the state, and in response, the Trump administration has sued, teeing up a legal battle over the most far-reaching crackdown on popular services like Kalshi and Polymarket. It comes as states confront a growing standoff with the Trump administration over how to regulate the industry, which allows people to bet on virtually anything.

The new state law makes it a crime to host or advertise a prediction market, which it defines as a system that lets consumers place a wager on a future outcome, like sports, elections, live entertainment, someone's word choice and world affairs. The prohibition extends to services supporting prediction markets, like virtual private networks, that could allow consumers to disguise their location and get around the ban. It would force prediction market sites like Kalshi and Polymarket to leave the state, or face possible felony charges. The law takes effect in August.

The law has a carve-out for event contracts that serve as an insurance policy in the event of "harm, or loss sustained" and for the purchase of securities and other commodities. The Commodity Futures Trading Commission's lawsuit seeks to block the law before it starts, arguing the prediction market industry should be exclusively regulated by federal officials. "This Minnesota law turns lawful operators and participants in prediction markets into felons overnight," said CFTC Chairman Michael Selig.

"Minnesota farmers have relied on critical hedging products on weather and crop-related events for decades to mitigate their risks. Governor Walz chose to put special interests first and American farmers and innovators last." An updated version of the prediction market bill allows trading on weather, an exception that followed pushback from the agricultural industry, which has historically used futures trading on weather as a hedge against storms and other inclement weather that can affect a harvest. Walz is expected to sign it soon.
"We as a state should decide how best and what regulations we think should attach to gambling, to protect public safety, to protect our kids," said Minnesota Rep. Emma Greenman, the Democrat who introduced the measure.

Kalshi spokeswoman Elisabeth Diana called the ban a "blatant violation" of the law. "Minnesota banning prediction markets is like trying to ban the New York Stock Exchange," said Diana, adding that "this actively harms users because it reduces competition and drives activity offshore."

Minnesota Becomes First State To Ban Prediction Markets

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  • And suddenly (Score:5, Insightful)

    by Anonymous Coward on Wednesday May 20, 2026 @12:10AM (#66152087)

    Republicans shut up about states rights.

    • Re:And suddenly (Score:5, Interesting)

      by ShanghaiBill ( 739463 ) on Wednesday May 20, 2026 @02:41AM (#66152179)

      Republicans shut up about states rights.

      Republicans have always been hypocritical about states' rights.

      Abortion was a states' rights issue until RvW was overturned, and suddenly they wanted a national ban.

      They want the Feds to overturn state-level pot legalization, ban sanctuary cities, etc.

      • by fluffernutter ( 1411889 ) on Wednesday May 20, 2026 @03:58AM (#66152231)
        You could have stopped at 'hypocritical'.
      • Yes --> ban sanctuary cities, or let them continue to exist with the addition of Feds being able to walk in to nab criminals using sanctuary cities as hiding places.
        Yes --> overturn state-level pot legalization (would you want a bunch of stoners to come into your little convenience store (where families shop with their kids) reeking of pot? What's to stop them from getting high and driving around? I know I sure love getting into an elevator that a pothead was in, and smelling like pot), and maybe no

        • by Ksevio ( 865461 )

          Living in a state that legalized pot, the legalization didn't really change the number of stoners. We still have laws against driving under the influence.

      • "Abortion was a states' rights issue until RvW was overturned, and suddenly they wanted a national ban." Wow! That's is some rarified Grade A gaslighting. It wasnt a state issue until it was overturned. Until then the Supreme Court was saying it abortion was a right that states couldn't take away.
  • by beelsebob ( 529313 ) on Wednesday May 20, 2026 @12:18AM (#66152101)

    Theyâ(TM)re betting sites. Simple as that. Thereâ(TM)s no investment going on here. Itâ(TM)s just straight up gambling. Why are we letting them get away with the rebrand?

    • by Gravis Zero ( 934156 ) on Wednesday May 20, 2026 @04:25AM (#66152255)

      It's just straight up gambling. Why are we letting them get away with the rebrand?

      Because I have have $250K riding the on the idea that we'll let them get away with it!

    • A futures market is a prediction market as well. Most futures contracts are bought and sold with no intention of taking delivery. They are regulated at the federal level.

      Straight forward gambling (activities where outcomes are determined by chance) is regulated by the states. However the Commerce Clause clearly grants the power to regulate interstate commerce to the federal government.

      So we have a proper jurisdictional argument about who gets to regulate prediction markets and presumably who gets to colle

      • Most futures contracts are bought and sold with no intention of taking delivery.

        The key difference is that they still bought the contract. Betting on an outcome, the only stake is fictional. If you're wrong in a futures market, you might have overpaid for some grain and have to figure out what to do with it - you won't lose all of the value.

    • They are following the example set by Uber: Calling it "ride sharing" instead of a taxi service successfully got around the laws.
      If it worked for them... why not for the online gambling industry?

  • amazing (Score:5, Insightful)

    by SirSlud ( 67381 ) on Wednesday May 20, 2026 @12:19AM (#66152103) Homepage

    It's hilarious to see a federal government sue a state for banning an insanely unregularly shitshow.

    "Minnesota banning prediction markets is like trying to ban the New York Stock Exchange,"

    This is your future, United States. Just the dumbest shit spoken imaginable, in the service of protecting the freedom of separating people from their money, 24/7, backed up by an administration who nakedly wants dumb people to do dumb things - oh, the ways in which such policy posture enriches them personally? Totally unrelated.

    • "Its legal when the president gets his taste."

    • It's hilarious to see a federal government sue a state for banning an insanely unregularly shitshow.

      "Minnesota banning prediction markets is like trying to ban the New York Stock Exchange,"

      This is your future, United States. Just the dumbest shit spoken imaginable, in the service of protecting the freedom of separating people from their money, 24/7, backed up by an administration who nakedly wants dumb people to do dumb things - oh, the ways in which such policy posture enriches them personally? Totally unrelated.

      The first insanity, is labeling horrifically addictive gambling as "predictive markets" and pretending all the horrifically addictive shit simply goes away with a re-name. Especially for children who become horrific gambling junkies by age 15 off nothing more than loot boxes and Pokemon pack breaking.

      The second insanity, is realizing THIS logical legislation, came from fucking Minnesota. Where imaginary children lear all day at the expense of taxpayers funding Somalian spending sprees. Like we need a pre

    • Re:amazing (Score:5, Funny)

      by rsilvergun ( 571051 ) on Wednesday May 20, 2026 @08:45AM (#66152437)
      We literally made Biff Tannen presidents of the United States. Honestly Trump is probably worse as far as I know Biff wasn't a pedophile.
  • PSA (Score:5, Funny)

    by dohzer ( 867770 ) on Wednesday May 20, 2026 @01:22AM (#66152129)

    Guys, I just found out that Polymarket is *not* what you would think it was based on the name.

  • by Kamineko ( 851857 ) on Wednesday May 20, 2026 @01:37AM (#66152135)

    Bet they didn't see that coming

  • From https://www.revisor.mn.gov/bil... [mn.gov]
    Prediction markets; hosting prohibited.
    A person is guilty of a felony if the person, for consideration and as part of a business:
    (1) creates a prediction market;
    (2) operates, manages, or controls a platform or system intending that consumers will use the platform or system to make wagers in a prediction market; (3) intentionally facilitates the operation of a prediction market by:
    (i) identifying or listing events knowing the events will be used by consumers to ma
  • by Alain Williams ( 2972 ) <addw@phcomp.co.uk> on Wednesday May 20, 2026 @01:58AM (#66152151) Homepage

    Trump and cronies appear to indulge in insider trading [bbc.co.uk] on these prediction markets.

    Meanwhile IRS is banned from auditing Trump’s past tax returns [theguardian.com] -- what does Trump have to hide ?

  • Start punishing the users in your jurisdiction.

  • ... Which is likely another slush fund for politicians

    Prediction markets are "accessible" to the general public in a way that the stock market is not, from a comfortability standpoint.
    The random person on the street is gambling if they buy or short a stock. They haven't done the reasearch nor are they likely capable or motivated to.

    But prediction markets offer intuitive things they can trade on comfortably (even if they don't do it wisely).

    So the growth of prediction markets likely kills a golden goose in

    • by maladroit ( 71511 ) on Wednesday May 20, 2026 @03:08AM (#66152195) Homepage

      They haven't done the research nor are they likely capable or motivated to.
      For most people, stock market investing is pretty easy:
          - Buy VTI. If possible, do it in an IRA or 401k.
          - Hold on to it.
      The Bogleheads [bogleheads.org] philosophy absolutely works.

      The challenge for many is having funds to invest, especially if they do stupid things like gambling in prediction markets.

    • by spitzak ( 4019 )

      The difference has nothing to do with the knowledge.

      In the stock market, the money put in is actually used to advance the value of the stock. It's an investment just like you paying somebody to make widgets (that manufacturer could screw up his work and lose all your money, but that possibility does not make it gambling). In polymarket the money you put in is not used in any way to advance the outcome you are betting on.

    • by Anonymous Coward

      >intuitive

      lol, that's one word for insider knowledge

      a word for everyone else is Sucker

      the only difference with the new game is who gets a house cut

  • Average person -> Views stock market as a fairly risky thing. They don't know about portfolio, indexing, straddles, and such.
    They only know "buy it if you think it's going to go up, sell it if you think it's going to go down".
    And you are 100% right about them probably not having the finances to do this many times. RobinHood and fractional shares were an attempt to solve that problem but I'm not sure if it's in the mindset of the average bear.

    I'm really talking about the people in the lower socio-econom

  • The federal government has declared these betting agencies are legal: The states automatically lose jurisdiction. I think the courts have already ruled the states have no right to contradict the federal government: Thus, "states' rights" when the states have to pay (or, it's too contentious for the White House to get involved) but not when federal employees can make a profit.
  • The prohibition extends to services supporting prediction markets, like virtual private networks, that could allow consumers to disguise their location and get around the ban.

    Bingo! There's why.

  • The part about banning prediction markets is a distraction. What they're actually after is VPNs. They want to outlaw your privacy so they can collect your data. This is explicitly a part of the package. They are outlawing VPNs so they can track you down.

    • Good luck with that.

      Businesses rely on VPNs. There is absolutely no way they can be banned without causing utter collapse of business connectivity.

    • They've been collecting your data since easily WW1.
      Now that everyone has cell phones, it's a piece of cake to track you down.

    • They want to outlaw your privacy so they can collect your data.

      They are already collecting your data.

      They are outlawing VPNs so they can track you down.

      VPN or not they are already tracking you down.

  • by ArsenneLupin ( 766289 ) on Wednesday May 20, 2026 @07:05AM (#66152355)
    After all somebody could have the idea of betting on the specific day on which Trump will die. Iran will lose the bet (but won't mind), and "somebody" will win it :-)
    • Odd as it may sound a public market on this would also give the secret service better information to protect against such an attempt. There's also nothing stopping underground markets from doing this in the same way that the mob ran illegal betting operations for decades. The problem is unsolvable because a certain percentage of humans like to gamble regardless of how illegal it is and that demand will always create a market to satisfy it. The best solution may be to legalize it, but to place it under heavy
  • by schwit1 ( 797399 ) on Wednesday May 20, 2026 @10:31AM (#66152619)

    Nevada, Maryland, and Ohio federal district courts sided with states.
    Nevada: Dissolved Kalshi injunction; ruled sports contracts resemble gambling, not CFTC swaps.
    Maryland: Denied preemption; state gambling laws apply.
    Ohio: Denied injunction; similar reasoning.

    New Jersey and Tennessee courts have favored Kalshi/CFTC.

  • What are the odds?!
  • Republicans just wear the irony on their shoulders at this point. Zero fks to give about any of the values they used to stand for. Wars, budget, family values? pppsshshshsh we're making $$, to hell with your outdated "values"

    Law and order party fighting like to hell to normalize sports booking? Totally fking scans. Eventually, when it blows up in their face and legions of gambling addicts do what they always do, these ghouls will find a way to blame Biden and the dems for letting them do it.

    Just another day

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