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Minnesota becomes first state to ban prediction markets

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Re: Minnesota becomes first state to ban prediction markets

#101

Post by fasterik »

everdrive wrote: post #3

I wonder if it can really be enforced. It's clear that prediction markets are a scourge -- there seems to be no upside whatsoever.

Information aggregation is the theoretical upside of prediction markets. Granted, their effectiveness in that role is an empirical question. For gambling in general, the upside is that people obviously enjoy it, not to mention the right/freedom to make choices about how one spends time and money as a responsible adult.

If harm to the consumer and societal burden are the downsides you're concerned about, you could justify banning smoking, alcohol, and junk food for the same reasons. We don't generally do that because we recognize that where there's demand there will be a market, whether it's legal or illegal. So you also need to weigh the potential harms of a black market against those of a legal and regulated market.

Re: Minnesota becomes first state to ban prediction markets

#102

Post by jacobgkau »

bluGill wrote: post #47
abrowne wrote: post #30

Earlier quoted context omitted.

There's plenty of legal gambling in Minnesota. To quote the Minnesota Legislative Reference Library it includes "horse racing, a card club at Canterbury Park, Indian tribal casinos, charitable gambling, and a state lottery." ( https://www.lrl.mn.gov/guides/guides?issue=gambling )

There might be a couple more, but there is far less legal gambling in MN than anywhere else I've been in the US (though I have not been everywhere in the past 5 years, and I assume laws have changed enough to ignore experience older than that). Indian tribal casinos are only legal because they are in a separate country as far as the state is concerned. (they don't bother, but each reservation has a good case to join…

> Indian tribal casinos are only legal because they are in a separate country as far as the state is concerned. (they don't bother, but each reservation has a good case to join the UN if they wanted to)

A case for it, maybe, but I think the way you've worded this is a bit of an exaggeration. As you said, they're separate as far as the state is concerned, in some respects (even that's somewhat case-by-case and debatable). Comparatively, it's much more generally recognized that federal law does apply to tribes. The US calls tribes "domestic dependent nations," which is short of independent sovereignty, and the UN would generally only admit members who are recognized as independent and sovereign. Native American tribes are "separate countries" like states are separate countries-- in principle, kind of, but in practice, not really anymore. Individual states can work with UN bodies on projects (like California recently joining the UN health network), but they can't be admitted as members.

All of that said, gambling is, of course, a very well-known thing that's allowed to happen on tribal lands.

Re: Minnesota becomes first state to ban prediction markets

#103

Post by tyg13 »

wizzwizz4 wrote: post #90
kyledrake wrote: post #87

They're not going to get rid of them, they're just going to drive them underground, which will make them impossible to regulate, which will make using them less safe. I don't participate in prediction markets, but I would bet everything I own on this outcome.

Making using them less safe means that certain kinds of better are less likely to use them, which may be a purpose of this legislation.

Exactly. I see this common idea trotted out that "where there's a will, there's a way" -- if the government bans something, the ban will never be effective, because people still want that thing, and so a ban will just encourage violating the law.

But that's highly contingent on that thing being something people are willing to violate the law over, and on the convenience of that thing not being significantly impacted by prohibition. Neither of which are true for prediction betting (it's almost identical to sports betting in that regard, imo.) The only reason these markets proliferate is precisely because they are legal.

Re: Minnesota becomes first state to ban prediction markets

#104

Post by shawn-butler »

stock_toaster wrote: post #5
everdrive wrote: post #3

I wonder if it can really be enforced. It's clear that prediction markets are a scourge -- there seems to be no upside whatsoever.

> I wonder if it can really be enforced. At the very least maybe it would make the advertising (tv, college campuses, etc) of prediction markets illegal in Minnesota? That alone seems like a good thing.

The law also goes after payment providers and network providers (vpn) etc if they "knowingly" provide service to anyone who engages in prediction market betting.

The law[0] as written is a mess. You could in theory shut down the "legal" Minnesota state lottery that is otherwise carved out from the law by claiming they are providing data on outcomes via the internet if someone outside the state is betting on the outcome of the lottery in a prediction market.

[0]: https://www.revisor.mn.gov/bills/94/2026/0/SF/4760/versions/... (search for "ARTICLE 8")

Re: Minnesota becomes first state to ban prediction markets

#105

Post by cyberax »

_--__--__ wrote: post #76
overgard wrote: post #73

Earlier quoted context omitted.

I think sports betting is a lot less harmful than prediction markets. With sports betting if someone throws a game to get a pay day, for instance, the only real consequence is on the reputation of the sport. In prediction markets, people can do all sorts of awful things to make money as insiders..

Most available data suggests that sports betting is much worse for the people making the bets, as it better targets people with poor impulse control. Bad bets in political markets aren't causing measurable increases in bankruptcy and domestic violence rates ( https://thezvi.substack.com/p/the-online-sports-gambling-exp... ).

Likely because this type of betting is still niche. Give it some time.

Re: Minnesota becomes first state to ban prediction markets

#106

Post by jeltz »

superfrank wrote: post #34

For the record, Minnesota currently has a complete ban on sports betting. We've seen a couple other states that allow sports betting go after prediction markets. Personally, I feel that any state that allows sports betting is going to struggle to argue a case to ban prediction markets because you're essentially arguing over implementation details. Even arguments that certain prediction markets are ripe for insider tr…

In states which allow sports betting it is still regulated. Thet are just an illegal betting sites.

Re: Minnesota becomes first state to ban prediction markets

#107

Post by jeltz »

mayneack wrote: post #94
superfrank wrote: post #34

For the record, Minnesota currently has a complete ban on sports betting. We've seen a couple other states that allow sports betting go after prediction markets. Personally, I feel that any state that allows sports betting is going to struggle to argue a case to ban prediction markets because you're essentially arguing over implementation details. Even arguments that certain prediction markets are ripe for insider tr…

Arguing over implementation details is a pretty common thing for laws to do. Maybe it would weaken the logical consistency of their laws, but that's not really a thing that matters. Why do states allow hunting some animals and not others? Why do states distinguish between different forms of income to tax? It's all implementation details.

I don't see why it even would weaken the logical consistency. Just because a state allows gambling does not mean they need to allow anyone to open a casino or betting site. You still need to apply for a licence and follow local regulations. If the prediction markets make sure to follow the regulations they should obviously be granted a licence to operate.

Re: Minnesota becomes first state to ban prediction markets

#108

Post by kube-system »

kyledrake wrote: post #87

They're not going to get rid of them, they're just going to drive them underground, which will make them impossible to regulate, which will make using them less safe. I don't participate in prediction markets, but I would bet everything I own on this outcome.

That's already what it is. They are an underground gambling site pretending that they're not doing things that they literally do by calling it something else. They're like a drug dealer who thinks they're slick by calling their drugs "research chemicals".

Re: Minnesota becomes first state to ban prediction markets

#109

Post by superfrank »

kube-system wrote: post #89
superfrank wrote: post #77

Earlier quoted context omitted.

Sure, but that's not really an argument to ban prediction markets, it's an argument to regulate what the public can or cannot bet on. Most major online sportsbooks have taken bets on the US presidential election for well over a decade. I can't imagine anyone really arguing that it's okay for DraftKings to offer that market, but not okay for Polymarket to offer it. I put it somewhere else in this thread, but there are…

> Sure, but that's not really an argument to ban prediction markets, it's an argument to regulate what the public can or cannot bet on. I wasn't making any argument above in either way. But the reality is that sports betting is not legal in much of the US. DraftKings is only legal in about half of US states. Minnesota does not permit DraftKings to operate in their state. They don't permit any kind of online gambling…

I totally agree with your response to my first point. I have another comment in this thread that might be at the top right now, but I basically say that I think the fact that Minnesota, a state that has a complete ban on online sports betting, is bringing this case actually gives them an advantage over previous states who've brought cases because the entire argument can just be "if it walks like a duck and talks like a duck..." as opposed to trying to explain why betting on the Super Bowl on Kalshi is somehow different than making the same bet on DraftKings.

On your second point, I don't disagree, but those issues aren't tied to prediction markets. Traditional online sportsbooks have allowed gambling on presidential and state elections for at least a decade now. Kalshi and Polymarket have taken this to the extreme, but they didn't start the fire.

We should be restricting what people can bet on regardless of the technology used. My concern with tying these two points together is that law makers will assume that solving problem one also solves problem two, when it doesn't. I'm worried that law makers will just outright ban prediction markets and go, "job done" leaving the door open to bring them back by creating some new gambling method that technically isn't a prediction market.

I don't want Polymarket allowing bets on whether we're going to war, but I also don't want DraftKings offering that bet. On the flip side, I frankly don't care if someone wants to bet on the Super Bowl, or the winner of Survivor, of how much rain New York will get tomorrow whether it's on Polymarket, or Kalshi, or DraftKings, or anywhere else. Prediction markets are how people are placing bets. I don't actually care how the bets are places, I care what is being bet on and I think most people would agree with that.

Re: Minnesota becomes first state to ban prediction markets

#110

Post by jeltz »

nojito wrote: post #22
ranger207 wrote: post #18

Earlier quoted context omitted.

I'm curious to see how this works out, because sports betting is _not_ in the CFTC's remit, and Kalshi etc's argument that states can't regulate them because they're not technically sports betting is contrary to the spirit of the law

There’s no “house” or “book” aspect to Kalshi. They are nothing more than contracts that are bought and sold between individuals.

Have you heard of Betfair? A UK company which has done "prediction markets" since 2000. In the Europe it is called a betting exchange and regulated like sports betting. And betting pools is another form of betting which is way older than that and there are no house in them either.

And by your argument poker or backgammon would not be gambling either.

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