Sports betting comes to Minnesota via prediction markets
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The long-running debate at the Minnesota Capitol over sports gambling is moot for now: Prediction markets essentially allow gamblers to wager on anything they could with a sportsbook — and more.
Why it matters: Opponents say prediction markets operate like the wild west — and the state of Minnesota, Indian tribes and casinos don't get a cut of their revenue, as they would from sportsbooks.
Catch up quick: Operators like Kalshi and Polymarket have surged in popularity, allowing users to speculate on everything from sporting events to politics to wars. Online sportsbooks FanDuel and DraftKings have also launched prediction markets, which let them enter states like Minnesota where sports gambling is illegal.
- Prediction market operators counter this isn't sports betting, but more akin to buying and selling shares in a stock exchange.
What they're saying: "It's the exact same thing as sports gambling, they're just using different words," former GOP state Rep. Pat Garofalo, who authored sports betting legislation, told Axios. "Even for proponents of sports gambling legalization like myself, it'd be kind of nice if we had some rules."
Zoom in: State Sen. John Marty (DFL-Roseville) believes these prediction markets are illegal and ripe for corruption, and will cause gambling addiction and mental health problems.
- He told Axios he will pursue legislation to "do anything we can to block the prediction markets" in Minnesota.
- "The federal government is not doing its share, so until the courts step in we have to do everything we can."
Yes, but: Regulating the industry on a state level could be tough. Several states are pursuing legal action against prediction markets, but the federal Commodity Futures Trading Commission has promised to fight state efforts to regulate or ban them.
What we're watching: If the rise of prediction markets actually kills efforts to legalize sports betting in Minnesota. The Sports Business Journal reported that states with legal sports betting are likely to lose revenue as customers switch to prediction markets.
The bottom line: DFL House Leader Zack Stephenson (DFL-Coon Rapids), who has spent years trying to negotiate a deal on the issue, told Axios sports betting is not dead at the Legislature.
- But he said it's "issue number 27 on the agenda this year."
The things you can speculate on
On Polymarket, you can bet (the parlance is that you buy a contract) on the Wild to win the Stanley Cup. A $10 buy would pay $212 if Minnesota wins.
Yes, but: It gets darker and more serious. Some other markets on the website:
Will Gov. Tim Walz be charged with a crime by the end of the year? Polymarket users give it a 21% chance.
Will a federal agent be charged with a crime related to the shooting death of Alex Pretti? As of Tuesday, there was a 9% chance.
What was U.S. Rep. Ilhan Omar sprayed with at a recent town hall? Urine, poison and bacon grease are all options, with chances below 1%.
The bottom line: These are the type of wagers that worry Marty, especially when people could manipulate the outcomes. For example, he said, a lawmaker could bet on the passage of a policy they vote on.
- "It could corrupt every aspect of our society," Marty said.