A public safety bill that is due to be sent to Minnesota Gov. Tim Walz would represent an unprecedented attempt to regulate prediction market exchanges for any state government in the United States. If Walz signs the bill or allows it to pass into law, Minnesota would be the first US state to try to restrict trading on the exchanges by explicit legislative means.
As a result, Walz’s signature or inaction could also prompt the US District Court for the District of Minnesota to become the site of multiple legal challenges to the statute. Should Minnesota prevail, the language in this bill could become a model for other states to adapt.
SF 4760 proceeds out of conference with prediction market amendment
With time growing short in Minnesota’s 2026 legislative session, a conference committee in St. Paul ironed out an omnibus legislative package on Wednesday that includes several provisions targeting the trading of designated contract markets (DCMs) on platforms like Kalshi. The bill, SF 4760, includes a lot of the language from SF 4511, which the Minnesota Senate approved earlier in May.
On Wednesday, the Minnesota House of Representatives approved the SF 4760 conference committee report 100-32, as the Senate followed with a 57-9 affirmation of the report. As a result, whether the bill becomes law is now up to Walz.
If SF 4760 gets enshrined in Minnesota’s code, the tenets of SF 4511 will have many ramifications for prediction exchanges. Partners of exchange like Kalshi would have consequences to consider as well.
SF 4760 equates prediction market trading with gambling, criminalizes promotion
The language in SF 4760 significantly increases the stakes for offering and promoting trading of DCMs among people within Minnesota’s borders. The bill characterizes contract trading as gambling and bans trades in many types of markets outright, including those related to sporting events.
Furthermore, the operation of exchanges or the promotion of the same could be grounds for criminal prosecution in Minnesota under SF 4760. Individuals of interest in such investigations may face felony charges.
Due to the seriousness of the risk, enactment of SF 4760 is unlikely to go unanswered. In fact, there may be multiple responses.
SF 4760’s enshrinement almost sure to trigger legal challenges
Given how proactive platforms like Kalshi have been to challenge enforcement actions in other states, it’s likely that Kalshi will challenge the constitutionality of SF 4760 should it become law. Other exchanges may file similar complaints in the federal district court for Minnesota.
A separate challenge from the Commodity Futures Trading Commission is another possibility. These actions might feature different arguments but ultimately end up in the same place of asking the court to enjoin Minnesota from enforcing the new law and declaratory relief that the statute is unconstitutional.
If initially successful, that litigation will test to what extent Minnesota is willing to devote resources to defending the statute. Some of that decision may depend on the actions of other federal courts and circuits, although litigation of this nature has not yet risen to the attention of the US Eighth Circuit Court of Appeals.
Other states will watch these lawsuits if SF 4760 is enacted, because if Minnesota successfully defends the statute, it would signal that the law’s tenets could pass muster there too. Whether that activity will come to pass wholly depends on how Walz decides to proceed for now, though.
