Minnesota Approves Ban on Sweepstakes Casinos and Prediction Markets

(AsiaGameHub) –   On April 30, Minnesota legislators approved two gambling measures aimed at online sweepstakes casinos and prediction markets, receiving strong bipartisan backing. The legislation now moves to the House prior to the May 18 session cutoff.

Good to Know

• SF 4474 was approved 62-3 and aims at dual-currency sweepstakes casinos.
• SF 4511 passed with a 56-10 vote and focuses on prediction market platforms.
• Both measures carry criminal penalties and are currently pending House review.

Minnesota Targets Two Online Gambling Formats

Since online gambling is prohibited in Minnesota, Senate legislators cited this to support two bills in a single day. SF 4474 seeks to prohibit dual-currency sweepstakes casinos, whereas SF 4511 looks to ban prediction markets related to sports, elections, court decisions, weather, conflicts, awards, and other upcoming occurrences.

The legislation regarding sweepstakes targets casino-style offerings utilizing two currencies, specifically one redeemable for cash, prizes, or similar rewards. Legal responsibility extends beyond just the operators. Payment processors, financial institutions, geolocation services, content vendors, platform hosts, and media partners could also encounter legal repercussions if they facilitate these platforms for Minnesota residents.

Attorney General Keith Ellison previously addressed this matter last November by issuing cease-and-desist letters to 14 online gambling entities, such as Fortune Coins, LuckyLand, and Zula Casino. Despite this, some platforms persisted. SF 4474 would grant Ellison and the Commissioner of Public Safety more explicit authority to file felony charges.

A potential loophole remains. As the bill specifically addresses dual-currency sweepstakes models, single-currency variants might challenge the law should Minnesota enact it.

Under SF 4511, prediction markets face a distinct prohibition. The bill establishes that creating, operating, advertising, or assisting platforms allowing consumers to wager on future events constitutes a felony. Exceptions remain for insurance, commodity futures, bingo, horse racing, lottery tickets, and private social wagers.

Senator John Marty described the situation directly. He stated: “Prediction markets are simply gambling, yet they have exploited loopholes to bypass our regulations and facilitate sports betting on their sites.”

Legal battles appear imminent. Senate Minority Leader Johnson cautioned that federal lawsuits have trailed similar state measures. According to him, “they’re going to be coming to Minnesota soon. It’s almost a guarantee that every state that’s passed this so far has dealt with a lawsuit.”

Senator Jordan Rasmusson also supported the prohibition despite the broader legal ambiguity.“We are witnessing the swift growth of these prediction markets, and the expansion of corruption that accompanies them,” Rasmusson observed.

A side story created some awkward timing. DFL Senator Matt Klein co-sponsored the prediction market legislation and voted for both prohibitions after previously acknowledging a $50 wager on his own congressional primary race via Kalshi. Kalshi imposed a fine and a five-year suspension on him. Klein stated: “This was a mistake, and I apologize.”

The House currently has corresponding bills filed: HF 4410 for sweepstakes casinos and HF 4436 for prediction markets. Neither has progressed significantly, although legislators could consider the Senate versions directly. Governor Tim Walz has not yet announced his stance.

Both bills are backed by tribal gaming organizations, as well as religious and civic groups that typically resist gambling expansion. Gambling in Minnesota is largely restricted to tribal casinos, horse racing, and card clubs, meaning the state does not experience the same division in commercial casino lobbying found in other regions.