On Monday evening, Gov. Walz signed into law what became the first state ban on prediction markets, websites where Americans can gamble on everything from elections to sports to oil prices. Almost immediately, the Commodity Futures Trading Commission sued Minnesota to block the law from taking effect.

The legal news cycle has framed the question as: Should the federal Commodity Futures Trading Commission regulate prediction markets, or should it be left to the states? While that is a real question that deserves to be argued on its own merits, that is not the real story.  

Hidden in plain sight in this new law is a provision that should concern every Minnesotan, regardless of political party or ideology, who still cares about government surveillance, free speech on the internet, and the dangerous precedent that state and local government are setting nationwide about who has the right to be anonymous online. Minnesota’s law doesn’t just ban prediction market websites from operating in the state. It also makes it a felony to knowingly provide “supportive services” to a prediction market website that would allow such other person to identify a consumer’s location.

In layman’s terms, this means VPN providers could potentially be criminally liable in Minnesota for simply offering their services to Minnesota residents. VPNs, or virtual private networks, are not just for gamblers. They are the basic infrastructure of anonymity on the internet. They protect a journalist’s source. They protect a victim of domestic abuse who is looking up shelter information online. They protect whistleblowers who talk to journalists. They protect political dissidents, crime victims, people seeking prohibited healthcare information, and everyday Americans who simply want to browse the internet without leaving a trail of personal data for their government, foreign governments, corporations, data brokers, or malicious actors to collect and exploit.

Minnesota’s primary concern was stopping prediction market betting through platforms such as Kalshi or Rainbet; however, attorneys for VPN companies do not care about the distinction between your decision to request anonymous access that’s gambling-adjacent versus healthcare-adjacent, legally sensitive, or just plain private. When VPN companies and their employees can be charged with a felony for providing their core service to Minnesotans, they must respond by either restricting service to an entire population or taking a personal criminal risk to protect their customers’ privacy. That chilling effect occurs at the infrastructure level, and trickles slowly but surely downstream; from a Minnesotan trying to gamble on a banned platform, sure, but also from the human rights activists, lawyers, and journalists doing things far more noble than gambling online.

Believe it or not, this is old news. And Minnesota is far from the first state to explore this type of anti-privacy framework. Several conservative majority states began this trend by passing “age verification” laws for online adult entertainment. When citizens fought those laws by routing around the resulting IP-based geo-blocks with VPNs, politicians in those states figured out the next obvious step in the fight against online pornography: go after the VPNs themselves.  

Utah enacted a law this spring making platforms liable for VPN-using visitors, a move which industry leaders have described as a way to “punish lawful users who care about their privacy.” Similarly, Wisconsin introduced a bipartisan bill with a VPN-blocking provision before backpedaling under intense public pressure. Michigan State House Republicans have also proposed the rather self-righteously titled “Anticorruption of Public Morals Act,” which would require ISPs to monitor and block all VPN traffic statewide, with fines of up to $500,000 for providers who don’t comply. The justifications vary, protecting children, stopping gambling, and curtailing adult entertainment, but the regulatory move is always identical: make anonymity a source of criminal or civil liability for companies.

There is a pattern. Whenever a state decides to crack down on “anonymous” access to something it doesn’t like, gambling in MN,  adult entertainment in Utah or Texas, the inevitable follow-up is always some regulation that attempts to chill the right to privacy itself. When the stated goal is protecting children, citizens concerned about online privacy sound crazy when they try to raise the alarm, but when the goal is gambling, then it suddenly becomes palatable. This isn’t about politics. It’s about the power to decide who has the right to privacy. Once you surrender that privacy, there is no turning back. VPNs aren’t a loophole; they’re a lifeline. For millions of Americans who rely on them for reasons ranging from political to personal to professional, a VPN is the difference between having a shred of privacy in the digital age and living in a virtual panopticon.  Minnesota meant to protect its citizens from predatory gambling practices. It very well may have given every state in America a road map for chilling, or perhaps killing, the right to privacy instead.