A Minnesota lawmaker who has been a longtime advocate for consumer protection says his state could soon be home to a bill to regulate so-called “prediction markets.”
“We’re certainly open to a bill,” Sen. John Marty, a member of the Minnesota Democratic-Farmer-Labor Party, told GamblingHarm.org in an interview. Marty, who has sponsored other gambling-related legislation, added that Minnesota could also sue to try to stop the controversial sports betting platforms.
“We must stop prediction markets from taking over here if the federal courts won’t stop them,” Marty said. “Prediction market sports betting is illegal and clearly gambling.”
Marty said there are no immediate plans to introduce a bill, but he called prediction markets “a huge fight.”
Pressure Mounting
On Dec. 19, online gambling giant DraftKings launched its new sports betting product, DraftKings Predictions, in numerous states where it didn’t already offer mobile sports betting, which included Minnesota.
Other prediction markets, most notably the early market leader Kalshi, are currently allowing Minnesotans to gamble on sports despite no state law authorizing such gambling. Fanatics recently launched a prediction market app, and FanDuel announced plans to do so soon.
Prediction markets, which grew in popularity in 2025, have a controversial Commodity Futures Trading Commission (CFTC) registration that enables them to facilitate a stock-market-style form of online sports gambling. Critics say the CFTC has turned a blind eye to illegal sports betting, an activity taxed and regulated by states.
Minnesota Would Follow New York
In November, New York Assemblyman Clyde Vanel, a Democrat from Queens, introduced a bill to regulate prediction markets. His legislation, which seeks to ban prediction markets from taking sports bets in New York, was the first of its kind to combat the nascent U.S.-facing platforms.
According to Victor Rocha, Conference Chair at the Indian Gaming Association, there are “rumblings” of a similar bill in California, which banned sweepstakes casinos — another controversial form of online gambling — in late 2025.
“Those rumblings about prediction market legislation in California are getting louder,” Rocha wrote online on Dec. 8. He declined to elaborate when contacted by GamblingHarm.org.
State bills have an uphill battle, according to widely-cited gaming attorney Daniel Wallach.
“State legislative efforts to ban or regulate prediction markets seem a bit premature with so many pending court cases addressing whether state laws can be applied to such activities,” Wallach wrote on LinkedIn on Dec. 19 following the DraftKings Predictions launch.
“Until that issue is settled in the federal courts — which could take several years — state legislation would likely not be very effective. The future of sports prediction markets will ultimately be decided by the Courts or Congress, not state legislatures.”
Is Sports Betting Legal in Minnesota?
Despite the launch of prediction markets, house-banked sports betting remains illegal in Minnesota.
The legal cloud around prediction markets doesn’t turn Minnesotans into criminals if they use these platforms. There could be a future in which prediction market operators face civil or criminal exposure.
What Minnesotans should be concerned about is that prediction markets can be highly addictive and financially harmful. Like all forms of gambling, users will most likely lose money in the long run. Prediction market fees result in users experiencing a significant negative return.
Marty said that sports betting lobbyists are using prediction markets to pressure Minnesota into legalizing traditional house-banked sports betting. He doesn’t believe those lobbying efforts will be successful in Minnesota in 2026.
For years, sports betting lobbyists have failed to convince Minnesota lawmakers that legalized sports betting is a good idea. In 2024, Marty tried to thwart industry-friendly legislation by introducing his own version with strong regulation. The industry fiercely opposed his legislation.
“Prediction markets are the same argument they made with offshore betting,” Marty said of the sports betting industry’s use of foreign gambling sites as a scare tactic to push for legalization.
While offshore gambling sites are predatory, legal sports betting leads to a rise in population-level financial harm and is associated with higher crime rates. Half of online bettors experience issues with their play.
The rise of prediction markets won’t help declining public opinion of sports betting.
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