Minnesota Governor Signs Ban on Prediction Markets, Making It the First State to Do So

(AsiaGameHub) –   Following the legislature’s passage of a bill banning prediction markets by a significant margin last week, Minnesota Gov. Tim Walz has completed the process by signing the legislation into law.

The move occurs amid heightened conflict between state regulators, attorneys general, and the federal agency, the Commodity Futures Trading Commission (CFTC). The CFTC has frequently contested the power of gaming authorities and state officials to, in its words, override federal rules.

Prediction Markets Set to Go Out in Minnesota, but a Lawsuit Tries to Challenge This

However, whereas gaming officials or attorneys general in other instances have typically moved against prediction markets using cease-and-desist orders, Gov. Walz’s support for the lawmakers‘ bill establishes a new standard—the complete prohibition of prediction markets in Minnesota and the resulting criminalization of their activities.

“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,” stated the bill’s sponsor, Minnesota Rep. Emma Greenman.

The CFTC, however, anticipating Gov. Walz’s endorsement of the bill, has acted swiftly by filing a lawsuit aimed at preventing the law from taking effect on August 1, 2026, as disclosed on the regulator’s website.

“The new legislation represents the most aggressive move by a state to shut down CFTC-regulated markets and undermine the federal regulatory regime set up by Congress more than 50 years ago,” CFTC Chairman Michael S. Selig said in an official release.

He contended that the legislation aims to transform legal prediction market operators and users into “felons overnight.”

Prediction Markets Attacked in the US, But They Hold Their Ground

Minnesota conceded on some points; the initial version of the bill to ban prediction markets required a key revision to permit trading on weather outcomes, which the agricultural sector considers highly valuable.

Although Minnesota is the first state to formally ban prediction markets, it is not alone in adopting a tougher position against them. Many state gaming regulators have labeled the offerings from platforms like Kalshi and Polymarket as “gambling” that lacks standard regulatory oversight.

The prediction market companies have rejected this characterization, maintaining that their products have a long-established history and represent financial instruments not subject to gambling statutes.