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Senate moves to ban short‑term prediction markets and online sweepstakes, citing consumer protection
Summary
The Minnesota Senate approved bills to clarify that short‑term prediction markets and online sweepstakes that mimic casino play are illegal under state gambling law, following extended debate about federal preemption, tribal impacts and fraud risks.
The Minnesota Senate moved on April 30 to tighten state gambling laws, approving measures aimed at curbing short‑term prediction markets and online sweepstakes that lawmakers said exploit loopholes in state law.
Sen. Scott Marty, sponsor of Senate File 4511, told colleagues the bill is intended to close a gap used by platforms that market ‘prediction markets’ as futures contracts. “If we don’t regulate this this year it will just take off,” Sen. Marty said, arguing the state must act “to make it absolutely clear that this is illegal” in Minnesota when platforms behave like organized betting operations.
Sen. Rasmusson, sponsor of Senate File 4474, described online sweepstakes casinos that use dual‑currency systems and casino‑style games. “They use a dual currency system where they will take cash for people buying so‑called gold coins so they can get so‑called sweeps coins,” he said, adding that the bill targets operations that “walk like a duck and talk like a duck.”
Debate highlighted competing legal and policy concerns. Opponents, including Sen. Johnson, warned of federal preemption and ongoing litigation involving the Commodity Futures Trading Commission (CFTC), urging caution: “If the CFTC has jurisdiction over this then we will not be able to regulate that through these laws,” he said while describing the risk of costly lawsuits.
Supporters emphasized consumer protection and tribal sovereignty. Sen. Kunesh warned that unregulated online platforms could erode tribal gaming revenues and tribal self‑government; she cited 2024 tribal gaming revenue figures to underscore the stakes. Senators pressed authors on carve‑outs for long‑term financial hedging used by farmers and other businesses; sponsors said those uses remain exempted in the bills’ language.
Senate File 4511 passed on final roll call 56‑10; Senate File 4474 passed 62‑3.
What happens next: both measures will be sent to the House (or, for companion files, continue through the legislative process) and could face litigation and implementation questions if enacted, as several senators noted.
Votes at a glance: Senate File 4511 (prediction markets) — final passage 56 yeas, 10 nays. Senate File 4474 (online sweepstakes ban) — final passage 62 yeas, 3 nays.
