Prediction Markets in Minnesota: The Only State to Criminalize Them
Minnesota makes operating, facilitating, or advertising a prediction market a felony starting August 1, 2026. The operative law is Minn. Stat. § 609.7615, created by Laws of Minnesota 2026, ch. 118, which repealed and replaced an earlier version signed a week before. Traders are not covered. Three federal suits seek to block it, and no order has issued.
CRIMINALIZED
The law almost everyone is citing was repealed
Minnesota enacted its prediction-market felony twice. The first version arrived in S.F. 4760, signed May 18, 2026 and filed as Laws of Minnesota 2026, chapter 97. Eight days later the governor signed S.F. 3432, filed as chapter 118, which contains its own version of the same statute and an express repealer.
Chapter 118 says so in its own bill title: it is an act “repealing 2026 S.F. No. 4760, article 3, section 1, and article 8, sections 1, 2, and 3, if enacted.” Article 8 was the prediction-markets article. The operative law from August 1 is the chapter 118 text, and it differs from the repealed version in ways that change who is exposed.
The federal plaintiffs caught this. The government’s May 19 complaint pleads S.F. 4760 throughout. Its amended motion, filed nine days later, asks the court to enjoin article 6 of S.F. 3432 instead.
What the statute actually reaches
Subdivision 2 applies to a person acting “for consideration and as part of a business” who creates a prediction market, operates or controls the platform, intentionally facilitates one by listing events or holding funds or setting prices, provides data or verification services to one, or provides supportive services used to identify a consumer’s location, transfer funds, or process payments.
That last clause reaches vendors. Geolocation providers and payment processors serving a prediction market are inside the statute.
Traders are not. Nothing in the section criminalizes placing a position, and the exposure runs entirely to the business side.
There is no VPN provision. A full-text search of both enacted chapters returns no instance of “VPN,” “virtual private,” “circumvent,” “proxy,” or “spoof.” Reporting to the contrary describes language that does not appear in either version.
The advertising felony has no stated exception
Subdivision 3 reads, in full: “Prediction markets; advertising prohibited. Whoever advertises or markets financial or technological products that promote transactions prohibited under this section is guilty of a felony.”
Two drafting details carry weight. Subdivision 3 opens with “Whoever” and carries none of the “for consideration and as part of a business” limiting language that governs subdivision 2. And subdivision 4, which creates the exceptions, begins “Subdivision 2 does not apply to.” On the face of the enacted text, the exceptions reach the operating offense and not the advertising one.
Kalshi pleads a standalone First Amendment count against subdivision 3.
The penalty figures come from a different statute
Section 609.7615 states only that a violation “is guilty of a felony.” It prescribes no sentence. The five-year and $10,000 figures in circulation come from Minnesota’s default felony provision at § 609.03, which authorizes “imprisonment for not more than five years or to payment of a fine of not more than $10,000, or both.” The statutory phrasing is disjunctive, and Minnesota does not use lettered felony classes.
What is enjoined today
Nothing. There is no temporary restraining order, no preliminary injunction, and no stay anywhere in the record. Through July 31 the activity remains lawful in Minnesota. On August 1 the statute takes force unless a court intervenes first.
Three federal plaintiffs are trying. The United States and the CFTC sued the state on May 19. Kalshi sued on May 27. Polymarket’s US entity followed on May 28. Judge Katherine M. Menendez placed all three on a consolidated briefing schedule by text order on June 15, heard argument on July 2, and stated on the record that a written order would issue. As of the last docket activity on July 24, no ruling had been entered.
Litigation
United States and CFTC v. Minnesota, No. 0:26-cv-02661 (D. Minn.), naming the state, Governor Tim Walz, Attorney General Keith Ellison, and the Department of Public Safety. Filed May 19, 2026.
KalshiEX LLC v. Ellison, No. 0:26-cv-02778 (D. Minn.), filed May 27, 2026.
QCX LLC d/b/a Polymarket US v. Ellison, No. 0:26-cv-02841 (D. Minn.), filed May 28, 2026.
All three are before Judge Menendez on a consolidated briefing and hearing schedule. Each retains its own docket number. Trade coverage describing the cases as merged overstates the order, which designated them associated rather than consolidated under Rule 42.
What we could not verify
The certified transcript of the July 2 hearing is restricted from public electronic release until October 7, 2026. The state’s opposition memorandum and the parties’ notices of supplemental authority are behind PACER. No exchange has announced Minnesota geoblocking or a withdrawal effective August 1, and no company statement to that effect was located.
Primary sources
Questions
Is it illegal to trade on a prediction market in Minnesota?
No. Minn. Stat. § 609.7615 reaches people acting for consideration and as part of a business: operators, facilitators, data providers, and payment or geolocation vendors. Placing a position is not covered by the section.
Does the Minnesota law ban VPNs?
No. Neither enacted chapter contains any reference to VPNs, virtual private networks, circumvention, or proxies. The only location-related language runs the other way, exposing vendors who help identify a consumer's location for a prediction market.
What happens on August 1, 2026?
The statute takes effect and applies to conduct on or after that date, unless a federal court blocks it first. Judge Menendez heard argument on the injunction motions on July 2 and has not ruled as of the last docket activity on July 24.
Which bill is actually the law, S.F. 4760 or S.F. 3432?
S.F. 3432, enacted as Laws of Minnesota 2026, chapter 118. Its article 6, section 4 expressly repeals the prediction-markets article of S.F. 4760, which had been signed eight days earlier.
Can someone be charged just for advertising a prediction market?
Subdivision 3 makes it a felony to advertise or market products promoting prohibited transactions, and unlike subdivision 2 it contains no business limitation. The exceptions in subdivision 4 are written to apply only to subdivision 2.