Minnesota Is About to Ban Sweepstakes Casinos — While Sports Betting Legalization Quietly Died This Session

Minnesota is moving fast on multiple gambling-related fronts this session — and the picture that emerges is one of a state tightening its grip on unregulated operators while simultaneously leaving legal sports betting on the shelf again. Sweepstakes casinos are in the crosshairs, prediction markets are about to be classified as illegal gambling, and the sports betting bill that many hoped would finally break through? It never got a committee vote.

The Sweepstakes Casino Crackdown

In March 2026, Minnesota lawmakers introduced legislation to ban online sweepstakes-style casino games, and it has moved quickly. The bill under Senate File 4474 targets what sponsor Sen. Jordan Rasmusson called a straightforward clarification of existing law — banning any online game that uses a dual-currency system, lets players redeem virtual coins for cash or prizes, and mimics casino-style gambling. That description fits virtually every sweepstakes casino operating in the United States today.

The Senate Commerce and Consumer Protection Committee approved SF 4474 unanimously and referred it to the Judiciary Committee. The bill carries broad support from tribal gaming operators and charitable gaming groups, who argue that sweepstakes platforms exploit loopholes to avoid the licensing, taxes, and consumer protections that legal operators must follow. Minnesota Attorney General Keith Ellison had already sent cease-and-desist letters to 14 sweepstakes and offshore gambling sites back in November 2025 — the legislative action is a formal follow-through on that enforcement posture.

The bill extends liability beyond just platform operators. Payment processors, geolocation services, media partners, and platform providers could all face penalties if they support sweepstakes casino operations after enforcement begins. That last piece is significant — it mirrors the approach other states have taken to make the financial plumbing around these platforms just as legally exposed as the platforms themselves.

Prediction Markets Getting the Same Treatment

Minnesota is also moving to ban prediction market contracts on sports events, elections, wars, weather, and a host of other categories. Senate File 4511, sponsored by Sen. John Marty (DFL-40), passed the Senate Commerce Committee with a unanimous vote and was referred to the Senate Finance Committee. A companion measure, House File 4437, passed the House Public Safety Finance and Policy Committee and moved on to the Commerce Committee.

The legislation would make it a felony to operate or advertise these platforms in Minnesota, and would bar anyone convicted under the law from receiving a gaming license for ten years. Kalshi, Polymarket, and similar platforms — which gained mainstream attention during Super Bowl season 2025 after introducing sports event contracts — have become a priority target across multiple states. More than 80% of their volume has been tied to sports contracts, which cuts directly into the market that regulated sportsbooks would otherwise capture.

Sports Betting: Dead Again

Meanwhile, the sports betting bill that launched with some optimism this session went nowhere. Sen. Nick Frentz introduced SF 4139, which would give Minnesota’s 11 tribal nations the right to offer online sports betting and partner with up to one commercial platform each. The bill would set a 22% tax rate on revenue and earmark proceeds for charitable gaming, horse racing, and tribes not participating. The committee heard testimony on the bill in April 2026 — but took no action. No vote, no advancement.

This continues a painful pattern. Minnesota has been trying and failing to legalize sports betting since at least 2022. The core obstacle remains the same: an unresolved dispute between the state’s tribal casino operators, who hold exclusive gaming rights, and the horse racing industry, which wants a seat at the table. Add a legislature with split control and genuine philosophical disagreement about whether online sports betting causes harm — a recent UCLA Anderson School study found personal bankruptcy filings rose 25-30% in the years after legalization in betting states — and the path to legalization stays blocked.

Minnesota remains one of fewer than a dozen states without any form of regulated sports wagering. Residents who want to bet legally have to drive to neighboring Iowa or Wisconsin. Meanwhile, Minnesotans who want to bet illegally can access dozens of offshore platforms with little friction.

What This Means for Operators and Bettors

For sweepstakes casino operators, Minnesota is the latest state to signal that the free-to-play legal argument is wearing thin. States have clearly grown tired of the dual-currency model, and legislative action is now outpacing enforcement. Operators that have not prepared exit strategies for states like Minnesota are going to be scrambling.

For bettors, the message is blunt: Minnesota is actively reducing your options rather than expanding them. Legal offshore alternatives are going to face increasing financial friction as payment processor liability kicks in. And the legal domestic option — regulated sports betting — remains out of reach for the foreseeable future.

Whether the tribal vs. horse track standoff gets resolved in the next session remains to be seen. Some legislators still believe 2027 could be the year. They have said the same thing about every session for the past four years.