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For the record, Minnesota currently has a complete ban on sports betting.

We've seen a couple other states that allow sports betting go after prediction markets. Personally, I feel that any state that allows sports betting is going to struggle to argue a case to ban prediction markets because you're essentially arguing over implementation details. Even arguments that certain prediction markets are ripe for insider trading or morally wrong fall a bit flat when you realize that traditional sportsbooks let you bet on things like college basketball player props and the little league world series.

I'm still not sure Minnesota will win their case, but it feels like that detail gives them a lot better chance of winning compared to many other states.

Arguing over implementation details is a pretty common thing for laws to do. Maybe it would weaken the logical consistency of their laws, but that's not really a thing that matters.

Why do states allow hunting some animals and not others? Why do states distinguish between different forms of income to tax? It's all implementation details.

I think you could make a case in separating the two, of course opening further discussion, but because sports betting takes place in a comparatively very controlled environment I think the risk profile is pretty different versus, idk, betting that the temperate will be at or above a certain point and then someone sticks a hair dryer on the thermostat[1]. Cheating can happen in sports of course, but the risk profile and real-world impact I think is quite a bit different. Worth discussing, but I think that's an important distinction.

Separately, I believe over time that prediction markets will become the source of real world truth. Why? Because money is at stake and so validity and verification matter. It'll be interesting to see how, if this comes to fruition, how laws in states like Minnesota affect news reporting and journalism. It seems likely to me that at a certain point prediction markets will buy traditional media and news outlets to hire out the fact-finding and reporting teams to ensure ground truth, and of course to use journalism as the gateway to the market. So you read an article "China disappears random person" and then at the end you click a button and bet whether that person is alive or dead or whatever.

[1] https://finance.yahoo.com/markets/options/articles/polymarke...

I think sports betting is a lot less harmful than prediction markets. With sports betting if someone throws a game to get a pay day, for instance, the only real consequence is on the reputation of the sport. In prediction markets, people can do all sorts of awful things to make money as insiders..
> Personally, I feel that any state that allows sports betting is going to struggle to argue a case to ban prediction markets because you're essentially arguing over implementation details.

This seems to be based on the false assumption that state legislation on distinct but related topics must generally be based on a coherent, consistent rationale. This is, very much, not the case under any law that binds US states, nor is it a rule that, despite not existing in binding law, is in practice imposed as a constraint on state governments by the actions of the voters.

(Conversely, even if such a rule was imposed, in law or otherwise, any state that has rules regulating the offering of insurance contracts, including who could buy insurance against what events—which, as it turns out, every state does—would have exactly the basis they need to apply the same kinds of rules to prediction markets.)

I think the case is pretty clear regardless: gambling is supposed to be a state-regulated activity, and Kalshi is gambling but is regulated by the CFTC at the federal level. So I think the argument is "we want to be the ones to regulate sports gambling in our state," whoch is independent of whether or not it's currently legal in the state.

Or maybe I'm wrong, and "we don't want sports gambling" is different legally from "we want to be the regulator of gambling." But it seems like they're just variations of the same question, which is: do states have the power to regulate this?

I mean, that's exactly why a state has the right to regulate this, historically it has been an extremely regulated activity. You can personally feel however you want, but the fact that a state does allow sports betting does not diminish this even slightly.

This has been banned for generations. It's called gambling. Of course, we all have to sit through another round of Silicon Valley pretending they've discovered some new exciting business model that's just vice.

Unlicensed gypsy cabs, SROs, shift work, patent medicines, narcotics dealing, customs fraud, and smuggling already had established market entrants I guess.

In states which allow sports betting it is still regulated. Thet are just an illegal betting sites.
I'm not a fan of sports betting, but surely you can see how betting on a game is not the same thing as betting on a war? People generally don't die because of a sports game (although it happens rarely).
But I thought the Supreme Court said online sports betting was interstate commerce and out of the domain of state legislation. Or did I get that completely wrong?
They already made the argument themselves: they’re skirting current laws by calling them financial derivatives.
> Minnesota currently has a complete ban on sports betting.

Canterbury Park would like a word…

I don't particularly care for sports betting, but I'm extremely against the prediction markets that blatantly violate he Dodds Frank act, such as bets on whether America Will attack another country or if fires will swallow California.

There's just too many wrong incentives at play.

> 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.

Yikes. I am all for banning prediction markets but I feel like this is overreaching.

This is great news. From my perspective from someone who grew up in the 90s, America feels like we took the turn towards Biff Tannen's Pleasure Paradise. A future very fa from our promise filled with gambling, social degradation, and worse economic prospects for everyone. Gambling sites like Polymarket are just a symptom. More states need to move in this direction, because its just a tax levied on the uninformed to insider cashing in
While it's obviously sports betting, the fact is that federal law gives the CFTC the power to determine what is and isn't a future and expressly preempts state intervention in futures markets. And, the case as to why futures markets generally should be subject only to federal oversight is quite strong IMO. So, the case can quickly become whether or not the CFTC should consider sports betting to be a future, and judges typically defer to the executive branch when it's not obvious (and in this case I don't think it is, the bar owner in Philly hedging an Eagles loss is an entirely plausible, albeit unlikely and uncommon, situation).

While I am partial to the argument that the CFTC is actually taking away the states' 10th Amendment police power right, that is a somewhat tenuous case in comparison to the enumerated right of the federal government to provide sole jurisdiction to the executive branch to enforce a law (and not to mention a law that impacts interstate commerce).

I imagine Minnesota loses this case and what's far more likely is either a more liberal congress changes what is a future by law or a more liberal executive branch reduces the protections for Kalshi et al.

I could imagine cases where prediction markets could offer some actual insight, but in practice they seem few and far between. Most markets I've seen devolve into one or more of: betting on unimportant events (e.g. sports games), insider trading, or poorly written ambiguous resolution criteria. It's just hard for me to imagine that, on net, these markets will offer more societal good than the harm we've seen from sports betting.
The CFTC commission comprises five seats, four of which are currently vacant: https://www.cftc.gov/About/Commissioners/index.htm
Anyone taking bets on how that ban will last?
as the article notes, prediction markets are regulated by the CFTC as a commodities futures contract, so I'm not sure how any state law survives a federal pre-emption challenge. On the other hand, it's a little unusual to see a federal agency suing to protect its turf. Would've expected a class action by a Minnesota user of the service to bring the challenge instead.
*Minnesota becomes first state to ban the use of prediction markets as a loophole for sports gambling.
I wonder if it can really be enforced. It's clear that prediction markets are a scourge -- there seems to be no upside whatsoever.
It’s hard to pretend this isn’t at least gambling-adjacent when most people are simply betting on outcomes.
What did the prediction markets predict for this? Theoretically, if they're good at predicting then they should have predicted they'd be banned
Isn't the stock market a prediction market as well?
I think in 10 years we'll see the rise of online sports betting, including in prediction markets form, as a new opioids epidemic.

For some amount of people they use it recreationally to blow off some steam, but theres a segment of the population that ruins their lives on it.

In some sense it may be worse than opioids because a husband (its always the guy) can ruin their families finances in secret before the wife's credit card gets declines & she pulls on the threads to find six figures of hidden debt from it and realize they are about to lose their home.

In some ways, historically having gambling located in specific geographic areas that were not within most peoples daily travel routine ensured safer use.

Cue in the talking heads to tell us how devastating this ban is.
They've been banned for generations. It's called gambling.

Of course, we all have to sit through another round of Silicon Valley pretending they've discovered some new exciting business model that's just vice.

Unlicensed gypsy cabs, SROs, shift work, patent medicines, narcotics dealing, customs fraud, and smuggling already had established market entrants I guess.

One of the biggest commodity trading companies is in Minnesota (Cargill), where I would think that commodities are a prediction market too: They predict the harvest and relate that to a future price. Also there are quite some real estate investors in Minnesota, also due to tax arrangements. Wonder how that will pan out.
I hope play money prediction markets are untouched. They are useful and fun, and as far as I know, dont have the downsides of real prediction markets.
They're only doing this because they know Brock "Legnar" is gonna win at Summerslam

/s but not /s iykyk

Does this ban the prediction markets that don’t use real money but instead tokens that are worthless?
> 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.

I'm sorry, what the fuck?

There should be a ban on the instagram reels showing gambling like it's not a big deal. They are deliberately targeting teens and it's quite sickening.

If you work at one of these companies it's the same as working for a payday loan company. You are making blood money.

Maybe the states will save us when the Federal government finally succumbs to the cancer that is Trump.
It would be good if they banned Learing Centers.
Congrats Minnesota and good luck with enforcement.
Love it here, only sane state there is these days. Everywhere else is either brain dead, too hot, or too mean
Remember in the late 2010s when the hack Ajit Pai, then fCC Chair, said that the FCC couldn't or shouldn't enforce Obama-era Title 8 net neutrality? Remember how states like California then said "OK, it's not a federal issue so we'll do it at the state level"? Then remember how the DoJ, at the FCC's direction, sued California [1]?

Well, which is it? Was net neutrality a state or federal issue? The answer is it's, as always, a Schrodinger's STate's rights issue. That is, it's a "state's rights" issue when it suits them, a federal issue when it suits them and it's neither when it suits them. Lack of any kind of regulation is the goal. This isn't some libertarian pipe dream. It's just naked pro-company and pro-billionaire gutting of government to boost profits.

Fast forward to prediction markets. The CFTC regulates this (arguably). Another deregulation hack is in charge. And again, states like Minnesota who already ban sports betting are being sued. "State's rights" btw. We're seeing the exact same pattern.

This on the same day that the president who sued the IRS, which was defended by the president's DoJ and the recess appointee Attorney-General settled a $10 billion lawsuit right as a federal judge tosses it because the case lacked adversity [2].

Besides the J6 slush fund, part of this settlement is that the IRS is barred from ever investigating Trump, his family or the Trump Organization for tax fraud.

The level of corruption and kleptocracy here is beyond belief and what's really frightening is that a good 35-40% of the population not only don't care but actively support something they will never benefit from and there hasn't been (and won't be) any political price paid for any of it. The president's endorsement still carries weight and just today, we've had the most expensive Congressional primary in history (~$35 million) where Trump unseated a sitting Congressmen for daring to push for releasing the Epstein files.

[1]: https://www.justice.gov/archives/opa/pr/justice-department-f...

[2]: https://www.msn.com/en-us/news/insight/trump-eyes-1-776b-irs...

[3]: https://www.washingtonpost.com/national-security/2026/05/19/...

What a waste of time and energy
Doesn’t this violate commerce between states, effectively?
If a prediction market uses AI will this violate the federal ban on states impeding AI?
They're not going to get rid of them, they're just going to drive them underground, which will make them impossible to regulate, which will make using them less safe. I don't participate in prediction markets, but I would bet everything I own on this outcome.
They should ban the stock market as well then since the stock market is essentially just a prediction market.