Financial Regulation

Minnesota Law Banning Prediction Markets Creates Victimless Crime

A Minnesota senator got fined for insider trading on a prediction market. His response was to ban the platforms for everyone in the state.

Tosin Akintola | 5.21.2026 5:20 PM

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(Illustration Credit: Adani Samat. Photo: Ej Rodriquez Photography/Dreamstime)

Last October, Minnesota state Sen. Matt Klein (D–Mendota Heights) wagered $50 on the prediction market Kalshi that he would win his congressional primary this August. After Kalshi flagged the bet, Klein was fined $539.85 and received a five-year suspension from the platform in April. 

While he tried to frame his experience as similar to that of "many other Minnesotans," there should have been no ambiguity to Klein that his actions ran afoul of Kalshi's rules and federal regulations against insider trading. Rediscovering his morals, Klein then co-authored a bill in the Minnesota Legislature to ban prediction markets in the state, making it a felony for anyone to create, control, operate, support, or advertise with a prediction market.

On Monday, Democratic Gov. Tim Walz signed the bill into law, making Minnesota the first state to issue an outright ban on the platforms. The law draws the state into an ongoing feud between the U.S. Commodity Futures Trading Commission (CFTC), which is the federal agency that........

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