Sen. Matt Klein, DFL-Mendota Heights, presents the sports betting bill to the State and Local Government Committee February 13, 2025. The bill failed to pass on a 6-6 tie vote. Photo by A.J. Olmscheid/Senate Media Services.

State Sen. Matt Klein, a Democrat from Mendota Heights, was suspended from Kalshi after the prediction market company discovered the candidate for Minnesota’s 2nd Congressional District had bet on the outcome of his own election.

Klein, who is a Democratic-Farmer-Labor candidate for the seat currently held by U.S. Rep. Angie Craig, agreed to a five-year suspension and a $539.85 fine as part of a settlement agreement, according to a notice of settlement of disciplinary action from Kalshi. The prediction market company only recently blocked political candidates from betting on their own elections.

Klein was added as a market option, so that players could bet — or enter into a futures contract, in the parlance of prediction markets — on the 2nd District DFL primary, according to Kalshi.

“As a candidate, Klein qualified as a direct decision maker for the contract and had direct influence on the outcome of the underlying event,” Kalshi said in the notice.

In the statement to the Reformer, Klein said he placed a $50 bet last October that he would win the 2nd District DFL primary election.

“I heard from friends that there was a prediction market site with wagers on my primary race. I had never wagered on a predictions market previously. I was curious about how it worked. I set up an account and bet $50 of my own funds that I would win the primary,” Klein said.

Klein said that was the only bet he’s placed on a prediction market.

“This was a mistake, and I apologize,” Klein said. “My experience, like many other Minnesotans, points to the need for clearer rules and regulations for these types of markets.”

Klein’s major DFL opponents include former state Sen. Matt Little and state Rep. Kaela Berg. State Sen. Eric Pratt is the likely Republican nominee.

Kalshi is a prediction market platform valued at $11 billion and is available in all 50 states, including in those where sports betting is illegal, like Minnesota. Minnesota lawmakers this session have proposed a bill to ban prediction markets from operating here. Klein is a coauthor on that bill.

Most activity on Kalshi revolves around sports, but prediction markets have been able to skirt sports betting restrictions by arguing they are akin commodity markets, a view supported by the Trump administration.

Klein for years has been a proponent of legalizing sports betting in Minnesota and has authored sports betting legislation.

Kalshi touted its disciplinary action against Klein on Wednesday as an example of how the prediction market giant is cracking down on political insider trading.

“Just like in traditional financial markets, bad actors will try to cheat,” Kalshi said. “Regulated exchanges must constantly evolve and adapt their systems to address insider threats. These three cases are an example of how developing proactive engineering solutions can help identify illicit trading activity.”

Klein’s settlement was announced alongside two more: a Republican candidate in Texas’ 21st Congressional District; and a Democratic candidate in Virginia’s U.S. Senate election, though Kalshi didn’t name the candidates in its announcement.

Minnesota Reformer is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Minnesota Reformer maintains editorial independence. Contact Editor J. Patrick Coolican for questions: info@minnesotareformer.com.

This article, “DFL Sen. Matt Klein suspended from prediction market after betting on himself in 2nd District race,” has been republished from the Minnesota Reformer under Creative Commons license CC BY-NC-ND 4.0.