Minnesota has enacted a new law that makes it a crime to advertise and operate prediction market platforms within the state, with the measure taking effect on Aug. 1. The move adds state-level restrictions to a sector that includes both traditional web platforms and decentralized, crypto-linked markets where users wager on the outcomes of future events.
What the new law does
The measure, signed by the state’s governor, explicitly criminalizes the promotion and operation of prediction market services across Minnesota. While the statute’s detailed penalties were not immediately disclosed, the law’s classification of these activities as criminal offenses signals heightened enforcement risk for companies and developers offering event-based wagering products to Minnesota residents.
What are prediction markets?
Prediction markets allow participants to buy and sell contracts tied to the outcomes of events such as elections, economic indicators, sports, or technology milestones. In crypto and decentralized finance (DeFi), these markets often run on public blockchains, enabling users to create and trade outcome tokens without a centralized operator.
Implications for crypto and DeFi platforms
- Platforms that facilitate event-based trading—whether centralized or decentralized—may need to implement or strengthen geoblocking and compliance controls to avoid serving users in Minnesota.
- Marketing and affiliate programs targeting Minnesota could face legal exposure under the law’s advertising prohibition.
- The measure aligns with broader U.S. scrutiny of event contracts and prediction markets. Federal regulators, including the Commodity Futures Trading Commission (CFTC), have previously taken action against unregistered event-based platforms and challenged certain election-focused contracts.
Effective date and next steps
The law takes effect on Aug. 1, providing a short window for platforms to adjust access and marketing practices for Minnesota residents. Market participants should monitor state guidance and any subsequent rulemaking or enforcement actions that clarify how the statute will be applied, particularly to decentralized protocols and third-party promoters.