Sen. Matt Klein (D-Mendota Heights)
ST. PAUL, Minn. (KFGO/CBS) – A Democratic senator is facing backlash Wednesday night after admitting he placed a bet in his own political race. All while pushing a bill to ban the very same platforms that took his wager.
The prediction market platform, Kalshi, said its investigative team found that Minnesota Sen. Matt Klein, who is also vying to represent Minnesota’s 2nd Congressional district, placed a bet on himself to win his primary.
The platform said its newly implemented safeguards flagged and blocked not only Klein, but two other political candidates from trading on their own elections.
In October, Klein said he heard from his friends that there was a prediction market site with a wage on his primary race. He said he’s never wagered before but was curious and bet $50 of his money.
In March, he said he was notified that it was a violation. He reached a settlement with the platform, paid $539.85 and is banned from using the service for five years.
In a statement, Klein apologized, saying in part, “my experience, like many other Minnesotans, points to the need for clearer rules and regulations for these types of markets.”
But the controversy doesn’t stop there.
Klein is the co-author of a bill moving through the legislature that would regulate or possibly ban prediction markets.
David Schultz, a congressional law professor at Hamline University in St. Paul, said this incident raises ethical concerns.
“Someone who says, ‘I want to regulate this type of market,’ to now violating the basic rule of that market,” Schultz said. “It really poses a problem.”
Schultz said imbalance undermines the market. Unlike ordinary participants, candidates have an unfair advantage because they have access to internal campaign data.
Schultz says politics and gambling crosses the line.
One of his primary opponents, Minnesota Rep. Kaela Berg said in a statement, “Insider trading is wrong—whether it’s on stocks or politics. DC politicians keep profiting off their positions of power while working families get left behind. I’m running to put an end to that.”
In a statement DFL Senate Majority Leader Erin Murphy said, “as Sen. Klein has explained, he used Kalshi only once out of curiosity. I am glad that he recognized his mistake and has resolved the issue. 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.”
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