The War on Kalshi Just Escalated: Minnesota’s Felony Push May Reach Supreme Court

A sweeping public safety bill passed both chambers of Minnesota's legislature this week. If the governor signs it, the state becomes the first in the country to outlaw prediction markets entirely.

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Minnesota has never legalized online sports betting or online casino gambling. Now it's moving to close the one digital door that had stayed open. A bill embedded in a broader public safety package cleared both the House and Senate by wide margins this week and is waiting on Gov. Tim Walz's desk. If he signs it, operating or advertising platforms like Kalshi and Polymarket in Minnesota becomes a felony.

What the Bill Does

The legislation covers contracts tied to sports, elections, natural disasters, wars, and mass-casualty events. It doesn't just restrict users. It makes it a felony to create, operate, facilitate, or advertise a prediction market in the state. The Senate passed a standalone version 56-10 before the House folded it into the larger bill.

Rep. Emma Greenman, a Democrat from Minneapolis, framed it as a matter of state authority over gambling. Sen. John Marty, who authored the original bill, called prediction market sports betting "illegal and clearly gambling" outright. Concerns about addiction surfaced repeatedly during debate, along with insider trading worries. 

Kalshi Fires Back

The platforms aren't accepting this quietly. Kalshi spokeswoman Elisabeth Diana responded publicly after the bill passed, calling it "peak hypocrisy" given that Minnesota's government collects millions annually from casinos and slot machines. Kalshi's broader argument has always been that these are federally regulated event contracts, not bets, and that the CFTC's oversight is sufficient.

The Legal Road Ahead

This dispute is headed to court regardless of what Walz does. Kalshi has already sued Utah over similar legislation. The CFTC has previously gone after states including Wisconsin, New York, Illinois, and Arizona for restricting prediction markets. Courts are split: the Third Circuit ruled in favor of the platforms, while a Ninth Circuit decision is still pending and expected to go the other way. A split between circuits almost certainly forces the Supreme Court to weigh in.

Rep. Nolan West, a Republican who voted against the Minnesota bill, warned the state is walking into an expensive legal fight it may not win.

Minnesota isn't the end of this story. It might just be where the fight finally forces a definitive answer.

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Accuracy note: Market data referenced in this article reflects information as of May 14, 2026. Prediction market prices are live and shift continuously. Always verify current information directly at Kalshi.com and Polymarket.com before trading.