States Tighten Laws on Sweepstakes, Prediction Markets

Lawmakers in multiple states moved this week on bills targeting online sweepstakes, unlicensed gambling operations and prediction markets. Iowa and Louisiana passed measures to increase enforcement powers, while the Minnesota Senate approved two bills restricting sweepstakes and certain prediction-market contracts.

Iowa passed SF 2289, which expands the authority of the Iowa Racing and Gaming Commission to pursue illegal operators. The bill names “illegal sweepstakes” and unlicensed “internet fantasy sports contests” and has completed legislative approval; it now awaits formal enrollment before being sent to the governor.

Louisiana approved HB 53, an amendment to the state racketeering statute that adds specified gambling offenses as predicate acts for racketeering prosecutions. A separate sweeps-specific bill, HB 883, which previously passed the House, advanced from a Senate committee this week and remains under consideration in the Senate.

The Minnesota Senate approved SF 4474, a bill that would prohibit online sweepstakes games that use a dual-currency payment model and allow users to exchange currency for prizes, awards, cash or cash equivalents. SF 4474 now moves to the Minnesota House. The Senate also passed SF 4511, a measure that would bar certain prediction market contracts tied to real-world events such as sports, politics and death, and extend prohibitions to participants in the ecosystem, including payment processors and financial institutions.

Other states debated regulatory and prohibition approaches for prediction markets. Iowa advanced SF 2470 from a House subcommittee after it passed the Senate; the bill would create a licensing and taxation framework for certain event-based contracts. Ohio introduced SB 430 to require operators offering sports-related prediction market contracts to obtain state licenses and pay taxes under existing sports-betting rules. North Carolina introduced HB 1171 to apply the state’s gambling laws to prediction markets and make related activity a criminal offense.

New York lawmakers introduced S10092, the “No Gambling Ads for Kids Act,” to prohibit online platforms and social media services from advertising gambling-related products to users under 18. The bill defines “gaming-related gambling” to include video-game mechanics such as loot boxes and add-on transactions where real or virtual currency is spent for randomized rewards. New York also moved several responsible-gambling measures: A09575 advanced from committee with new reporting and disclosure requirements, A09146 advanced to require mobile sports-wagering operators to provide direct links and referrals to problem-gambling services (a Senate companion S10154 was introduced), and S10153 would establish a task force to study proposition betting risks.

In Colorado, the Senate passed SB 131 and SB 163. SB 131 includes limits on advertising language, promotions and deposits; earlier provisions to ban proposition bets and to prevent sportsbooks from limiting sharp bettors were removed before passage. SB 163 would adjust the state’s gambling regulatory framework and will continue through the legislative process.

The measures described now proceed to the next steps in their legislatures: enrollment, other chambers, committee review or governors’ consideration. Lawmakers, regulators and enforcement authorities will act on the bills as they move through those stages.