Minnesota Senator Asks National Council on Problem Gambling to End ‘Unholy Alliance’ with Kalshi

Minnesota state Senator John Marty has publicly called on the National Council on Problem Gambling to sever what he described as an “unholy alliance” with Kalshi, arguing the prediction market operator’s financial backing of the nonprofit runs counter to its stated mission. In a letter dated July 28 to NCPG Executive Director Heather Maurer, Marty wrote that “no amount of money is worth undermining your mission.”

The dispute centers on a $2 million, two-year investment Kalshi made in the NCPG, announced May 18, intended to fund a “strategic initiative focused on trader health and safety.” Marty, a member of Minnesota’s Democratic-Farmer-Labor party, said he understands the NCPG’s reliance on funding from the regulated gambling industry, but argued Kalshi belongs in a different category entirely given its status as what he called an “unauthorized and unregulated gambling business.”

A Fight That Has Spread Across Nearly a Dozen States

Marty’s letter lands amid a broader, rapidly escalating legal battle between state regulators and prediction market platforms. Minnesota became the first state in the country to pass an outright ban on prediction markets when Governor Tim Walz signed SF4760 into law on May 18, a measure that would have made it a felony to host, operate, or promote platforms like Kalshi within the state. The law was set to take effect August 1, but a federal judge granted a preliminary injunction just days beforehand, siding with Kalshi, Polymarket, and the Commodity Futures Trading Commission, which argued federal law likely preempts the state statute.

Minnesota is far from alone. Michigan, Nevada, Massachusetts, Washington, Wisconsin, and Kentucky have all pursued legal action against Kalshi or Polymarket over the past several months, generally arguing that the bulk of activity on these platforms amounts to unlicensed sports betting rather than legitimate futures trading. In Michigan, an Ingham County judge issued a temporary restraining order barring Kalshi from offering sports-event contracts to residents, threatening fines of $120,000 per day for noncompliance. Kalshi has consistently maintained it operates under the exclusive jurisdiction of the CFTC and has fought each state action in court, often with the federal government intervening on its behalf.

The Core of Marty’s Complaint

Marty’s letter leaned heavily on correspondence he cited from Michigan Gaming Control Board Executive Director Henry Williams, who wrote to Maurer that Kalshi’s efforts are “part of a broader strategy to remake the gambling industry — by bulldozing countless regulations and the consumer-protection safeguards that Michigan and other states have enacted to protect their residents and uphold the integrity of sports betting.”

Marty also took issue with NCPG messaging that described Kalshi as the “industry leader and pioneer, widely credited with legalizing prediction markets and building a safe, legal, regulated platform for millions of traders in America” — language he noted never once mentions sports betting, despite Marty’s claim that sports betting activity makes up as much as 85-90% of Kalshi’s overall volume. “Claiming something is legal doesn’t mean it is legal,” Marty wrote, pointing out that Kalshi is currently suing Minnesota even though state law explicitly treats its offerings as illegal gambling.

NCPG Holds Its Ground

Maurer pushed back on the characterization, telling CDC Gaming that the NCPG does not take a position on whether Kalshi’s products are legal. “We respect that organizations may reach different conclusions about how best to advance consumer protections, but NCPG remains committed to fulfilling our mission,” she said. Maurer added that the National Problem Gambling Helpline is already fielding calls from people reporting harm tied to prediction markets, and that the organization’s focus is on ensuring support is available regardless of how the legal questions are eventually resolved.

“Our concern is that trading event contracts can carry many of the same behavioral risks associated with gambling,” Maurer said, adding that such products “warrant the same public health attention, consumer education, and access to support as other forms of gambling.”

What Comes Next

With the CFTC beginning a rulemaking process to determine which event contracts it may deem “contrary to the public interest,” and litigation still active in multiple states, the underlying question of whether Kalshi’s sports-related contracts constitute gambling or federally regulated trading remains unresolved. Bettors weighing legal, regulated sportsbook promotions may want to keep an eye on how this fight over prediction markets ultimately shakes out, since the outcome could reshape how sports-outcome wagering is defined and taxed nationwide. For now, Marty’s letter adds another voice to the chorus of state officials pressing regulators and advocacy groups alike to draw a clearer line between prediction markets and the traditional, licensed sports betting industry represented by platforms in the SportsBooks space.