Minnesota lawmakers advanced two bills targeting sweepstakes casinos and prediction markets on March 24, approving the measures in committee and sending them forward for further consideration.
SF 4474: Sweepstakes Casinos Ban
SF 4474 would prohibit online sweepstakes games and restrict revenue from illegal gambling. The bill defines “online sweepstakes game” as a game, contest, or promotion that:
- Is available on the internet or accessible on a mobile device
- Utilizes a dual currency system
- Allows the player to exchange the currency for a prize, award, cash, cash equivalent, or chance to win a prize, award, cash, or cash equivalent
- Simulates casino-style or another form of gambling
The bill prohibits anyone from operating, conducting, or promoting online sweepstakes games in the state. The restrictions extend to payment processors, platform and geolocation providers, and media affiliates.
It directs state regulators to impose penalties under Minnesota Statute 325F.755, which defines penalties for violations of the consumer prize-promotion law.
Committee Hearing: “Effectively Online Gambling”
During the Senate Commerce and Consumer Protection Committee hearing, the bill sponsor, Sen. Jordan Rasmusson, argued that sweepstakes casinos are already operating as gambling products, despite their promotional framing.
“These are dual currency systems… played on casino games like slots, blackjack, and roulette. Effectively, it allows online gambling to occur in Minnesota.”
Rasmusson emphasized that the model satisfies the core elements of gambling:
“There is some consideration… a game of chance… and that you have that chance to win a prize.”
He framed the bill as a clarification of existing law on what constitutes a proper sweepstakes in Minnesota and as a ban on dual-currency casino-style games. Rasmusson noted that multiple states have moved to restrict or ban sweepstakes casinos.
Backers, including tribal representatives and charitable gaming stakeholders, argued that the platforms exploit a loophole to avoid licensing, taxation, and consumer protections required of regulated operators.
Opposition came from industry representatives, including ARB Interactive CEO Patrick Fechtmeyer, who warned the bill would not eliminate the activity.
“If this bill is passed, it will not eliminate this activity… [it will] push Minnesotans to… offshore operators who hide behind shell companies.”
Fechtmeyer maintained that sweepstakes platforms operate legally and that participation is always free. Lexi Morgan from the Social Gaming Leadership Alliance, a sweepstakes casino trade group, echoed concerns that the bill could overreach and eliminate legitimate promotional sweepstakes.
The committee approved SF 4474 and advanced it to the Judiciary Committee.
HF 4437: Prediction Market Ban Advances
HF 4437 would ban certain prediction market contracts tied to real-world events. The bill explicitly names several categories of prohibited event contracts:
- Sports events or outcomes within sporting events
- Casino-style contests or gaming promotions
- Events involving specific individuals or groups of people
- Political outcomes, including elections
- Catastrophic events such as wars or natural disasters
- Death or mass casualty events
HF 4437 extends the prohibitions to the entire ecosystem, including payment processors and financial institutions.
The measure also prohibits advertising these prediction markets under certain circumstances, including near schools or targeting a younger audience.
Committee Hearing: “Explosion of Gambling Without Guardrails”
During the House Public Safety Finance and Policy Committee hearing, bill sponsor Rep. Emma Greenman argued that prediction markets are rapidly expanding without oversight:
“What this has amounted to [is] the explosion of gambling in the last year without the guardrails and the safeguards that states… have been putting around gambling for years.”
Greenman emphasized that operators profit by facilitating trades between users:
“The platforms make money by charging bettors a fee for bringing together users of the opposite side of a bet.”
In practice, this means platforms act as intermediaries, matching users on opposite sides of a wager. She characterized platforms such as Polymarket as “an unregulated sportsbook… in a way to bet on almost anything.”
Greenman emphasized that prediction markets operate without consumer protections such as age restrictions, anti-money laundering requirements, and responsible gambling safeguards.
She also raised concerns about integrity risks, pointing to recent insider trading concerns regarding real-world events, and warned of broader implications:
“They could actually start to influence world events… if [participants] are in a position to actually influence the outcome.”
Lawmakers also raised ethical concerns about allowing betting on events such as wars, disasters, and violent incidents, arguing that such markets create problematic incentives.
Committee members questioned how the bill would function in practice, particularly regarding tribal gaming enforcement. Some noted that implementation could be legally complex.
Still, the committee approved HF 4437 and re-referred it to the Commerce, Finance, and Policy Committee.
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