Minnesota Pushes Ahead with Bills Targeting Sweepstakes Casinos and Prediction Markets

Sweepstakes casinos and prediction markets are feeling the heat right now, with increased scrutiny and state-level legislation. The latest regulatory action is in Minnesota, where its state legislators have unveiled a two-bill crackdown aimed at sealing loopholes in digital gambling. 

One bill, SF4474, aims to ban sweepstakes casino games. The other, HF4437, would make it a felony to run and advertise certain prediction markets, such as sports, disasters, and elections.

SF4474 has cleared the Senate Commerce and Consumer Protection Committee on March 25th, and is now with the Judiciary and Public Safety. On the prediction-market side, House lawmakers have approved the bill, and it now moves to the House Commerce Committee.

What’s Inside SF4474?

SF4474, a bill introduced by Senator Rasmusson and four other senators, has been on the fast lane since its introduction and first reading on March 17th. Right after its first reading, the bill was referred to the Commerce and Consumer Protection Committee, and just last March 25th, the committee approved its contents and re-referred it to the Judiciary and Public Safety.

The bill aims to prohibit sweepstakes casinos, or gaming platforms that operate using the dual-currency model. It defines online sweepstakes games as those available on the internet or accessible across devices, use dual currencies, simulate casino-style gambling, and allow players to swap their virtual currency for prizes or cash equivalents.

SF4474 authorizes state authorities to impose penalties under the state’s 325F.755, which outlines the penalties for violations of the consumer prize promotion law.

During the hearing, Sen. Jordan Rasmusson explained that these gaming platforms are operating as gambling products, despite their no-purchase requirement. Senator Rasmusson also stated that “there is some consideration… a game of chance… and that you have that chance to win a prize”.

Pressure is On Prediction Markets, Too

H4437, authored by Greenman, Fischer, Davids, Tabke and Frazier, specifically targets bets and other activities related to prediction markets. Filed last March 18th, the bill was initially referred to the Public Safety and Finance Policy Committee for debates and considerations. 

The bill explicitly bans certain prediction market contracts, such as sporting events, casino promotions, elections, and catastrophic events. During the hearing, Rep. Emma Greenman warned that these websites are “rapidly expanding without oversight”. She further explained that this has led to an “explosion of gambling, with guardrails and safeguards”.

The House committee has approved HF4437, and this has been re-referred to the Commerce, Finance, and Policy Committee.

REFERENCES:

• H4437

• SF4474