Minnesota's Prediction Market Felony Law — and the Federal Challenge That May Block It

What the Statute Does

Minnesota enacted the prediction-market provisions in 2026 Minnesota Laws, chapter 97, article 8, section 3, creating Minn. Stat. § 609.7615. The effective-date clause sets August 1, 2026, applying to crimes committed on or after that date.

Under the statute as written, a person commits a felony if, for consideration and as part of a business, they:

• Create a prediction market;
• Operate, manage, or control a platform or system intending that consumers use it to place wagers in a prediction market;
• Intentionally facilitate the operation of a prediction market;
• Provide data, information, or verification services to a prediction market, knowing they will be used to make or settle wagers; or
• Provide supportive services to a prediction market or a consumer, knowing the services will be used for prohibited purposes.

A separate subdivision addresses prohibited advertising, and another creates liability for violating a cease-and-desist notice. The statute also contains an exceptions subdivision.

The same article amends Minn. Stat. § 609.75, subd. 3, clarifying that commodity and securities contracts remain exempt from gambling laws "except as provided in section 609.7615," and extends authority under Minn. Stat. § 299L.03, subd. 12, to issue cease-and-desist orders and seek court enforcement.

Who the Law Targets — and Who It Does Not

This distinction matters and is easy to get wrong from headlines. The statute is aimed at the supply side: operators, facilitators, data and payment providers, and advertisers. The prohibited conduct is defined in terms of acting "for consideration and as part of a business."

What this means for you: § 609.7615 does not make a consumer's individual act of placing a wager a felony under that section. That said, this is a brand-new statute with no interpreting case law, other Minnesota gambling provisions exist independently, and the scope of terms like "facilitate" and "supportive services" is untested. Anyone whose business touches this space — including advertising, affiliate marketing, payment processing, or data services — should get specific legal advice rather than rely on a general summary.

The Pending Federal Challenge

Within a day of the bill's signing, the Commodity Futures Trading Commission sued Minnesota, arguing that Congress gave the CFTC exclusive jurisdiction over event contracts and that state gambling law cannot displace that authority. Kalshi filed its own suit shortly after, and Polymarket joined the litigation. All three sought a preliminary injunction to stop the statute from taking effect on August 1.

The Minnesota Attorney General's Office opposed, arguing the state is exercising historic police powers over gambling, that the law leaves ordinary commodity futures and commercial risk-management contracts untouched, and that platforms can comply by geoblocking Minnesota users.

The court heard argument on the injunction motions on July 2, 2026, before U.S. District Judge Katherine Menendez. As of this writing, no ruling has issued.

Minnesota is one of several states the CFTC has sued over prediction-market restrictions, and federal courts have split — some enjoining state enforcement, others declining to. That split makes the outcome here genuinely uncertain and makes eventual appellate review likely.

Three Possible Outcomes

• Injunction denied — the statute takes effect August 1, 2026, and enforcement may begin as to conduct on or after that date.
• Injunction granted — the statute is blocked, in whole or in part, while the case proceeds. It would not be enforceable during that period.
• Partial relief — the court could enjoin some provisions and permit others, which would leave a more complicated compliance picture.

Because the ruling was expected before the effective date, the practical status of this law could change within days of this post.

What to Do If This Affects You

If you operate, advertise for, provide services to, or process payments for a prediction-market platform with Minnesota exposure, the questions worth asking a lawyer are specific: whether your conduct falls within the statute's definitions, whether an exception applies, what the litigation status is on the date in question, and what conduct occurred before versus after any effective date. Criminal exposure turns on facts and timing, and a new statute under active challenge is the worst possible thing to guess about.

If you have received a cease-and-desist notice, talk to a lawyer before responding.