Minnesota lawmakers on Tuesday became the first in the nation to approve a ban on prediction markets, the trading platforms that offer sports event contracts and mimic traditional sports betting. Language prohibiting prediction platforms landed in an omnibus public safety bill in the Senate that went to conference committee.
The Senate approved the bill, 57-9, and the House approved it, 100-32.
The bill will now be sent to Gov. Tim Walz, who will have three days to act on it if he receives it before the end of the legislative session and 14 days if it is sent after the session ends on May 18. SF 4760 was sent to a seven-member bipartisan conference committee on May 5, and last Friday the committee approved an amended version that was sent back to both chambers. If Walz signs it, the bill would go into effect Aug. 1.
It seems likely that Minnesota will now be next on the Commodity Futures Trading Commission’s (CFTC) list of states to sue after Semafor reported last week that Chair Michael Selig was “monitoring” the situation. The CFTC has already sued Arizona, Connecticut, Illinois, New York, and Wisconsin.
Bill moved fast, leaving OSB behind
In Minnesota, Sen. John Marty introduced the prediction ban late in the session (March 17), but he was able to convince fellow lawmakers of the harms and havoc he believes the platforms could cause if they become entrenched. His SF 4511 passed out of the Senate but didn’t get any traction in the House as a standalone bill, so lawmakers inserted the language into SF 4760.
Minnesota lawmakers have not yet legalized sports betting despite more than a half-dozen attempts, and one legislator suggested that a prediction ban would seal the fate of legal sports betting.
“If that [prediction market ban] were to become law in the state of Minnesota, I think that is going to make the decision regarding sports betting or sports wagering online, and it’s going to ensure that it never becomes an option for folks here in the state that want to see it become an option,” Sen. Zach Duckworth said at an April 14 hearing.
While no other state has passed legislation banning prediction markets, some states and tribes are in court in attempts to keep the platforms from operating within their borders. Nevada so far has been the only one that has been successful, though a judge in cases involving Maryland granted an injunction to keep the platforms from operating, but both sides have agreed to allow them to continue until the case is resolved.
