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Prediction markets ban to go in effect Aug. 1
On August 1 Minnesota will become the first state to ban prediction markets. The ban makes operating and advertising prediction markets a felony.
ST. PAUL, Minn. (FOX 9) - Minnesota Gov. Tim Walz is taking new steps to keep state employees from using confidential information for personal gain on prediction markets.
Executive order targets insider trading on prediction markets
What we know:
Walz signed an executive order that bars state agency employees from using any nonpublic or confidential information gained through their jobs to participate in prediction markets. This applies even if the employee loses money or does not profit.
The order comes after a federal judge issued a preliminary injunction that stopped Minnesota from enforcing a new law banning prediction markets. That law had passed with bipartisan support and was scheduled to take effect on Aug. 1, which would have made Minnesota the first state to ban these platforms.
Employees who break the new rule could be disciplined or even fired.
Walz said in a statement, "State employees serve the public and shouldn’t make money off insider information."
The backstory:
Online prediction markets have become more popular, letting people bet on things like elections, sports and world events. State leaders worry that government employees could use their access to confidential information to gain an unfair edge, which could damage public trust.
Walz criticized the Trump administration and companies like Kalshi, saying, "It is clear that the Trump administration and companies like Kalshi are more interested in lining their pockets than protecting public trust and keeping people safe. Regardless of Trump’s grift, I am taking executive action to reinforce the strong ethical standards we have in Minnesota."
Officials also point out that these markets can encourage gambling addiction and raise safety and security concerns.
Why you should care:
The executive order is meant to protect public trust and prevent state employees from profiting unfairly. With prediction markets growing quickly, Minnesota leaders say it’s important to set strong ethical standards for government workers. The order reinforces that government jobs should not be used for personal financial gain, especially when it comes to sensitive or confidential information.
What we don't know:
It is not yet clear how the executive order will be enforced day-to-day, or if further legal challenges will affect Minnesota’s efforts to regulate prediction markets.
The Source: Information from the Office of Gov. Tim Walz.