Minnesota lawmakers pushed forward a proposal to prohibit prediction markets this week, while a separate effort to authorize online sports betting stalled in committee, highlighting continued divisions over gambling policy in the state.
During a Senate Commerce and Consumer Protection Committee hearing, legislators advanced Senate File 4511, a measure targeting prediction market platforms. The bill seeks to classify such platforms as illegal gambling operations rather than financial instruments. Lawmakers backing the proposal argued that these markets blur established legal boundaries and require clearer oversight.
Sen. John Marty, who introduced the bill earlier this year, emphasized the intent behind the legislation. “We’re saying no, these are bets, sports bets, bets on politics, things that are currently illegal,” he said. The proposal would make operating a prediction market a felony, carrying potential penalties of up to five years in prison and fines reaching $10,000.
Lawmakers Seek Clearer Enforcement Rules
Regulators told the committee that enforcement remains difficult due to legal ambiguity. Jon Anglin, director of the Alcohol and Gambling Enforcement Division, said agencies currently must decide case by case whether activity qualifies as gambling or financial trading.
Marty warned about broader risks, stating, “I’ve seen bets on military action … and I believe without this action saying this is violating our laws, we are going to have huge problems.” The proposal preserves traditional futures trading while excluding event-based contracts.
Lawmakers also questioned how companies present their services. Sen. Jordan Rasmusson said, “They’re telling consumers they’re a gambling company, but when they get sued, they say they’re futures markets.”
Sports Betting Effort Remains Stalled
The committee then reviewed Senate File 4139, a proposal to legalize online sports betting under tribal oversight, but took no vote. Sponsor Sen. Nick Frentz admitted the bill “likely isn’t going anywhere this year.” He added, “I do not think the federal government should be able to tell us what to do.”
Frentz compared betting restrictions to Prohibition, saying it “did not go well” and “gave organized crime the biggest boost in history,” adding it “encouraged lawlessness.”
Supporters argued regulation would address an existing market. Cameron Onumah cited a 2025 study estimating that $1.5 billion to $3.8 billion is wagered illegally each year in Minnesota.
Concerns Over Access and Social Impact
Testimony highlighted how easily residents can use offshore platforms. Attorney Scott Ward demonstrated the process and said, “Anybody who wants to bet on sports can use this.” He added, “In states where sportsbooks are operating and there are also prediction markets, people prefer sportsbooks. But prediction markets are running rampant in those states without regulation.”
Opposition focused on social harm. Rebecca Delahunt said, “addiction caused by the design of online sports platforms causes community breakdown,” affecting families and institutions.
Some lawmakers also questioned whether legalization would reduce illegal betting, citing research that suggests illicit markets often persist.
The prediction market ban now heads to the Finance Committee, while the future of sports betting in Minnesota remains uncertain.
Source:
“Minnesota Committee Passes Prediction Market Ban, Takes No Action On Online Sports Betting”, yahoo.com, April 14, 2026
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