Claim: Minnesota residents are now prohibited from using prediction markets to wager on sports-related event outcomes.

On Monday, Minnesota became the first state to outlaw prediction markets like Polymarket, Kalshi, and similar platforms. It became possible after Gov. Tim Walz signed a public safety bill (SF4760) into law. The law had backing from a bipartisan group of state legislatures and will go into effect starting  August 1 later this year. 

It effectively made it illegal to host or advertise a prediction marker site in the North Star State. The law dictates that a person who creates, operates, or advertises a prediction market, allowing users to place bets on future events, could be charged with a felony punishable by up to five years in prison and a $10,000 fine.

Our Verdict: Partially True

Although the law prevents people from operating such sites, it does not prevent Minnesotans from placing bets on the platforms themselves. According to a report from The New York Times, residents who place bets on these platforms would not face criminal penalties. 

Instead, the law is aimed at making the sites themselves unavailable. More importantly, the law will not take effect until August 1, meaning prediction markets can continue operating in the state until then, and residents are still free to place bets. 

However, since the bill was passed in Minnesota, the Trump Administration has intervened.

The Trump Administration has sued Minnesota

On Tuesday, the Commodity Futures Trading Commission (CFTC), the federal agency responsible for regulating certain financial markets, filed a lawsuit against the state of Minnesota in federal court. The agency argues that the state does not have the authority to block prediction markets from operating within its borders.

Prediction markets currently operate under federal law and fall under the oversight of the CFTC. In a news release following the passage of the Minnesota law, the agency described it as the strongest attempt by any state in more than 50 years to undermine the federal regulatory framework governing such markets.

The CFTC and Minnesota are now headed to court before the law is scheduled to take effect later this year. The outcome of the lawsuit will determine whether the state can enforce the ban or if prediction markets will continue operating in Minnesota.

It’s important to note that prediction markets have popped up in states where sports betting has been banned altogether. That’s because, as previously mentioned, prediction markets are operated under federal law and not state law. This allows people in those states to circumvent the sports betting ban to place bets on prediction markets. 

Our Fact-Checking Sources: 

• Lego Scan, May 18, 2026. SF4760
• The New York Times, May 19, 2026. Minnesota Becomes First State to Ban Prediction Markets
• NPR, May 19, 2026. Minnesota becomes first state to ban prediction markets
• Next.io, May 13, 2026. Is Kalshi Legal: In Which US States Is The Kalshi App Available?