Minnesota lawmakers have advanced legislation targeting sweepstakes casinos and prediction markets, moving closer to stricter oversight of online gaming platforms. Both bills cleared committee stages in the House and Senate, reflecting concern over unregulated digital gambling.
Senate File 4474 focuses on sweepstakes-style casino games, which resemble traditional slots, blackjack, and roulette but operate online with a dual-currency system. Players can buy one type of currency while receiving another as a bonus, which can then be exchanged for prizes or cash equivalents.
Lawmakers Target Dual-Currency Gaming
Supporters of the bill argue that this structure effectively mirrors gambling. During a committee hearing, Sen. Jordan Rasmusson said: “These are dual currency systems… played on casino games like slots, blackjack, and roulette. Effectively, it allows online gambling to occur in Minnesota.”
He added that the model includes the fundamental elements associated with gambling activity.
“There is some consideration… a game of chance… and that you have that chance to win a prize.”
Under the proposed legislation, operating or promoting such platforms would be prohibited. The restrictions would also extend to payment processors, geolocation services, and media affiliates, broadening the scope beyond the operators themselves. Enforcement would rely on existing consumer protection statutes, with penalties applied to those found in violation.
Supporters, including tribal gaming representatives, maintain that sweepstakes casinos avoid licensing requirements, taxation, and consumer safeguards required of regulated operators. They argue that closing this gap would ensure a more consistent regulatory environment.
Industry Warns Of Offshore Migration
Opponents caution that banning sweepstakes may not eliminate demand. Patrick Fechtmeyer, CEO of ARB Interactive, said: “If this bill is passed, it will not eliminate this activity. Instead, it’ll push Minnesotans to the more than 1,100 offshore operators who hide behind shell companies and don’t comply with consumer protections or sweepstakes laws.”
Some operators also note that platforms operate legally and allow free participation, warning that legitimate promotional sweepstakes could be affected.
Separate Bill Addresses Prediction Markets
Alongside the sweepstakes proposal, lawmakers have advanced House File 4437, which targets prediction markets. These platforms allow users to trade contracts based on the outcomes of real-world events, including sports, elections, and global developments.
The bill would prohibit contracts tied to a wide range of scenarios, including sporting outcomes, political events, wars, natural disasters, and incidents involving loss of life. It also extends restrictions to financial intermediaries and limits certain forms of advertising , particularly those directed at younger audiences.
During a committee hearing, Rep. Emma Greenman highlighted concerns about rapid growth in the sector: “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 raised concerns about consumer protections and the potential for market manipulation, including scenarios where participants could influence outcomes tied to financial stakes.
Next Steps
SF 4474 moves to the Judiciary Committee, while HF 4437 proceeds to the Commerce, Finance, and Policy Committee. Both bills enjoy bipartisan support, but enforcement challenges remain, especially for digital platforms spanning state and tribal jurisdictions.
Source:
“’Effectively allowing online gambling’: Minnesota lawmakers move to stop sweepstakes”, fox9.com, March 25, 2026
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