Key Points
- The Minnesota Legislature approved SF 4760, an expansive public safety measure containing prediction market prohibitions
- Criminal felony charges await operators, facilitators, advertisers, and payment processors under the legislation
- Prohibited wagers include elections, athletic competitions, weather patterns, public health emergencies, armed conflicts, and additional categories
- Federal regulators at the CFTC have already initiated lawsuits against five states, with Minnesota potentially next
- Implementation is scheduled for Aug. 1, 2026, pending gubernatorial approval
Legislators in Minnesota have given final approval to an extensive public safety measure that prohibits prediction markets and subjects those involved to serious criminal consequences.
The legislation, designated SF 4760, secured passage in the Senate with a 57-9 vote and cleared the House 100-32 following the completion of compromise language by a conference committee this past Friday.
The initial draft of the measure contained no provisions related to prediction markets. Earlier in the legislative session, the Senate had approved separate legislation specifically addressing prediction markets, which the House subsequently incorporated into the comprehensive bill.
When the modified legislation returned to the Senate, lawmakers declined to accept the alterations. This prompted the formation of a conference committee to negotiate the disagreements, ultimately producing a final text that retained the prediction market restrictions.
Scope of Minnesota’s Prediction Market Restrictions
The law characterizes a prediction market as any platform enabling consumers to place bets on future event outcomes beyond the control of the contracting participants.
The categories of events subject to the prohibition are extensive. They encompass sporting competitions, electronic sports, electoral contests, governmental decisions, judicial proceedings, meteorological phenomena, and public health emergencies.
Additionally covered are military conflicts, national crisis situations, political assassinations, incidents involving mass casualties, entertainment industry results, and even speculation on whether an individual will issue specific statements.
According to the statute, individuals commit a felonious offense by establishing, running, or administering a prediction market platform in a commercial capacity. Deliberately enabling prediction market transactions also constitutes a felony.
The legislation extends far beyond platform management. It encompasses the complete prediction market infrastructure, including entities providing geolocation technology, payment facilitation, financial transfers, and event outcome verification services.
Marketing and promotional activities for prediction markets would similarly become criminal violations under this framework.
The bill amends Minnesota’s existing gambling regulations to specify that commodity and securities agreements retain their exemption from gambling prohibitions, except where the new prediction market provisions apply.
Enforcement agencies would additionally receive authority to issue cease-and-desist directives and pursue court injunctions against those in violation.
The regulations are scheduled to become effective Aug. 1, 2026.
Possible Federal Regulatory Confrontation
Should the governor sign the measure, Minnesota may confront legal action from federal authorities. The Commodity Futures Trading Commission has already initiated litigation against Arizona, Connecticut, Illinois, New York, and Wisconsin following those states’ enforcement measures against prediction market platforms.
The CFTC maintains that federal statutes grant it sole authority over event-based contracts. Prediction market companies such as Kalshi have independently pursued legal action against states attempting to prohibit sports event wagering.
A Semafor investigation last week revealed the CFTC is monitoring Minnesota’s legislative activity and potentially contemplating litigation.
Minnesota legislators acknowledged this possibility during floor discussions. Senate Minority Leader Mark Johnson cautioned that legal action was “almost a guarantee” based on precedent from other jurisdictions.
Notwithstanding this caution, a bipartisan majority of lawmakers concurred that prediction markets exist in ambiguous legal territory requiring clarification through legislation.
In related developments, the Minnesota Senate approved SF 4474, legislation aimed at sweepstakes casino operations. That measure has encountered obstacles in the House and seems unlikely to advance before the legislative session concludes on May 18.
The prediction market prohibition now awaits the governor’s signature.
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