A Minnesota lawmaker who is a Democratic candidate for Congress has apologized for wagering through an online prediction market that he'd win his party primary.
State Sen. Matt Klein issued a statement Wednesday about using $50 of his own money last October to wager on the primary for the 2nd Congressional District seat. The seat is open as the incumbent, Rep. Angie Craig, runs for U.S. Senate.
“That was the only wager I have ever made on a predictions market,” Klein said. “This was a mistake, and I apologize.”
Klein said he learned in March he violated the online platform's rules. He said in a follow-up message that he paid a roughly $540 penalty. He is suspended from the prediction market platform, Kalshi, for five years.
Klein is one of three politicians nationally to be sanctioned for using that prediction market in a race they’re involved with, according to the company. The other candidates are in Texas and Virginia.
Kalshi said it flagged the cases as it pursues what it calls “political insider trading.” In Klein’s case, the site’s statement said an investigation by a surveillance team connected Klein to the account that placed the wager. When Klein was informed, Kalshi’s statement said he “quickly negotiated a settlement” that acknowledged violating exchange rules.
“Regardless of the size of a trade, political candidates who can influence a market based on whether they stay in or out of a race violate our rules,” Kalshi’s statement said. “No matter how small the size of the trade, any trade that is found to have violated our exchange rules will be punished.”
Klein told MPR News he will continue his congressional campaign.
State Rep. Kaela Berg and former state Sen. Matt Little are also seeking the DFL nomination.
Little made light of his rival’s admission, with a social media post that read: “I thought this might be a good time to say that I do not have a Kalshi account.”
State lawmakers are considering restrictions to prediction markets over concerns about insider trading and topics that push the bounds of decency. The bill is so far has been through three Senate committees, including one Klein chairs. He is a cosponsor.
“My experience, like many other Minnesotans, points to the need for clearer rules and regulations for these types of markets,” Klein said in his written statement.
DFL Senate Majority Leader Erin Murphy stood behind Klein.
“I am glad that he recognized his mistake and has resolved the issue,” Murphy said in a written statement. “Senator Klein has been supportive of banning prediction markets in Minnesota, and we look forward to taking these unregulated and pernicious products off the market this session.”
