Minnesota advances prediction market ban; sports betting on hold

On Tuesday the Minnesota Senate Committee on Commerce and Consumer Protection advanced Senate File 4511 to classify certain prediction market contracts as illegal gambling. The committee did not take a vote on Senate File 4139, a proposal to legalize and regulate online sports betting.

Senate File 4511 would make operating specified prediction markets a felony, subject to up to five years in prison and fines up to $10,000. The bill would authorize regulators to issue cease-and-desist orders and pursue legal action, while leaving criminal prosecution to local authorities.

Lawmakers framed the bill as an effort to close a legal gray area in which some platforms characterize their offerings as financial futures rather than wagers. Sen. John Marty argued, “We’re saying no, these are bets, sports bets, bets on politics, things that are currently illegal.”

Sen. Jordan Rasmusson pointed to advertising by some platforms that portray themselves as legal sports-betting apps while their legal defenses treat offerings as futures. He observed that marketing claims and legal positions can differ, saying, “They’re telling consumers they’re a gambling company, but when they get sued, they say they’re futures markets.”

After advancing the prediction market bill, the committee held an informational hearing on Senate File 4139 and did not vote. That proposal would place oversight of online sports betting with the Department of Public Safety, authorize up to 11 operator licenses for tribal entities, set a minimum betting age of 21, and require consumer-protection measures. The bill would direct revenue to responsible-gambling programs and require a baseline study of gambling prevalence with ongoing public-health monitoring.

Industry witnesses described an active illegal sports-betting market in Minnesota. Cameron Onumah, policy director for the Sports Betting Alliance, cited a 2025 estimate that Minnesota bettors place between $1.5 billion and $3.8 billion annually through offshore channels. In a live demonstration, Scott Ward, an attorney who represents several national operators, registered on an offshore site using a Minnesota ZIP code, deposited funds and placed bets with minimal verification and no additional age checks. He told the committee, “Anybody who wants to bet on sports can use this.”

Lawmakers questioned whether legal access would increase problem gambling and financial harm. Supporters of regulation argued a licensed market could provide consumer protections and capture revenue now handled offshore. Opponents cited studies linking expanded betting access to higher rates of financial distress. Minnesota has rejected prior sports-betting proposals on similar concerns, and the committee’s decision not to vote on SF 4139 reflects continuing division among legislators.

The prediction market bill follows actions in other states that have classified such platforms under state gambling laws. Senate File 4511 would codify prediction markets as betting to give regulators clearer authority to act against operators that state officials consider to be offering unlawful wagers.