Lynnae Williams Journalist
Lynnae is a journalist covering the intersection of technology, culture, and gambling. She has more than five years of experience as a writer and editor, with bylines at SlashGear and MakeUseOf. On the iGaming side,...
Read Full BioLawmakers in Minnesota have introduced two new bills targeting sweepstakes casinos and prediction markets, two of the fastest-growing and most closely watched areas of the legal gray-market gambling economy.
Both bills were introduced on March 16, with SF 4474 seeking to impose a complete ban on online sweepstakes games that use a dual-currency model and simulate casino-style gambling, and SF 4511 making it a felony to operate or advertise prediction markets tied to everything from sports and politics to catastrophic events.
Sen. Jordan Rasmusson (R) is the primary sponsor of the sweepstakes ban bill, and Sen. John Marty (D) is the chief sponsor of the bill that would prohibit certain prediction market wagers.
Minnesota Sweepstakes Bill Would Ban Dual-Currency Casino Games
SF 4474, the first of the twin bills, takes aim at the “dual-currency” model many sweepstakes casinos use. Under the proposed bill, an “online sweepstakes game” is defined as any internet-based promotion that simulates casino-style gaming and allows players to use a dual-currency system to exchange tokens for prizes, cash, or the chance to win.
The legislation would prohibit persons and entities from “operating, conducting, or promoting an online sweepstakes game in Minnesota.” This bill doesn’t stop at operators; it also targets the industry’s infrastructure, barring applicants, licensed entities, financial institutions, payment processors, geolocation providers, gaming content suppliers, platform providers, and media affiliates from supporting the operation or promotion of online sweepstakes games in the state.
According to the bill’s text, the commissioner of public safety and the attorney general would be responsible for enforcing its provisions and would be required to block companies or their affiliates from operating if they knowingly profit from the games.
Minnesota’s proposed ban arrives as the industry continues to argue that regulation is a better path than prohibition. In a recent interview with CasinoBeats, ARB Interactive CEO Patrick Fechtmeyer said these types of bans don’t eliminate the demand for sweepstakes-style games. Instead, he argued that by banning these platforms, states risk players moving to offshore platforms where they have no visibility.
“It’s not really a question of, ‘We ban this industry, and it’s going to go away,’” he said. “It’s, ‘Where does that money shift to? How do you capture that?’”
Minnesota Prediction Markets Bill Would Criminalize Sports & Event Contracts
SF 4511, the second of the twin bills, sets its sights on the increasingly controversial prediction markets industry. Under the proposed legislation, Minnesota’s definition of “what are not bets” would be amended so that certain event-based wagers would no longer fall within that exclusion, and operating those markets would be a felony.
The bill defines prohibited transactions as those depending on outcomes related to:
- Sports: Including specific athletic or nonathletic sporting events.
- Politics: Federal, state, or county elections and government actions.
- Catastrophes: War, national emergencies, natural disasters, or public health crises.
- Death: Assassinations or mass casualty events.
According to the bill’s text, certain types of advertising and marketing of these products would also be felony offenses, including ads aired during live sporting events, ads placed where at least 10% of the audience is expected to be under 21, and ads placed on public property or within 500 feet of a school or playground.
The proposed legislation would also make it a felony for payment processors, geolocation providers, gaming content suppliers, platform providers, and media affiliates to continue knowingly facilitating payments after receiving a cease-and-desist letter from the attorney general.
If a person or business is convicted under this statute, they’d be barred from holding a gaming-related license for 10 years.
National Push Against Sweeps & Prediction Markets
Minnesota is far from the only state moving to ban or restrict sweepstakes casinos and prediction markets.
Indiana lawmakers recently passed HB 1052, a bill that bans dual-currency sweepstakes casinos and authorizes civil penalties of up to $100,000 against operators or others who knowingly offer the games. Gov. Mike Braun (R) signed it into law on March 12.
In Maine, on March 12, the Senate passed LD 2007, which defines online sweepstakes as “unlawful gambling” and imposes civil penalties of up to $100,000 on operators.
On the prediction market front, earlier this year, lawmakers in Hawaii introduced HB 2198, which would classify prediction markets on athletics, politics, catastrophe, and death as illegal gambling. Illinois lawmakers introduced the ORACLE Act, a bill targeting sports event contracts, as well as political, catastrophic, death, and security markets.
