Minnesota Senate Committee Approves Sports Event Contract Ban, Hears Details on Sports Betting Bill

• The Minnesota Senate Commerce and Consumer Protection Committee gave a vote of unanimous approval to a bill that will prohibit certain prediction market contracts
• Sen. John Marty’s (DFL-40) bill, SF 4511, prohibits prediction market contracts based on sports, politics, war, weather, and other markets
• The committee also heard testimony on Sen. Nick Frentz’s (DFL-18) bill, SF 4139, to legalize online sports betting in the state

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The Minnesota Senate Committee on Commerce and Consumer Protection gave a vote of confidence to a bill that will prohibit certain prediction market contracts in the North Star State, while also hearing information on a bill that will create a new sports betting market.

Members of the Senate Committee on Commerce and Consumer Protections voted unanimously to approve Sen. John Marty’s (DFL-40) bill, SF 4511, which prohibits prediction market contracts based on sports, politics, war, weather, and other controversial markets.

The committee also heard testimony on SF 4139, a bill to legalize Minnesota online sports betting, but did not take any official action on the legislation.

Bill Banning Sports Event Contracts Moves Forward

Sen. Marty’s bill, SF 4511, today was recommended to pass and referred to the Senate Committee on Finance.

“You’ve seen news stories about people making bets on military actions, things like that, and I believe without this legislation making it clear that this is in violation of our gambling laws, that we’ll have that kind of thing here which causes huge conflicts of interest and insider trading problems,” Marty said.

The legislation will prohibit prediction market contracts centered around the following types of markets:

• An athletic event or game of skill
• Any game played with cards, dice, equipment, or any mechanical or electronic device or machine
• War, state or national emergencies, natural or human-made disasters, mass shooting, acts of terrorism, or public health crises
• Federal, state, or local elections
• Legal actions, including but not limited to a civil or criminal suit, grand jury action, jury trial, settlement, plea, or conviction
• Weather
• Death, assassination, or attempted killings
• Events in popular culture, including but not limited to awards and the date a piece of entertainment will be releasd
• Whether a person will make a particular statement

Sen. Jordan Rasmusson (R-9) said the legislation is important for both proponents and opponents of legalized Minnesota sports betting, as the state needs to declare what is and what is not legal betting in the state.

“It’s important the state of Minnesota put a marker in the sand and say the legislature should be able to debate and look at what forms of gambling we want to legalize, and what forms we want to remain illegal in the state,” he said.

Rasmusson pointed to marketing from Kalshi that has appeared in Minnesota, which claims its app is the “first legal sports betting app in the state.” Using the company’s logic and taking it a step forward, Rasmusson said the company could set up a roulette table and create a prediction market based on if a spin will be “red or black.”

“To me, that’s very obviously gambling.”

The Senate Committee unanimously recommended the bill to pass, with its members also declaring its passage will not have an impact on whether an introduced sports betting bill will be approved or not.

Committee Hears Testimony on Sports Betting Bill

Members of the committee also heard about an hour of testimony on Sen. Nick Frentz’s (DFL-18) bill, SF 4139, to legalize online sports betting in the state. The bill will provide for 11 licenses for all eligible Minnesota tribes, who will be able to partner with up to one sports betting company to use their sports betting platform.

Online sports betting tax revenues will be earmarked for charitable gaming, the horse racing industry, and tribes not participating in the market.

“It is fair to say that there is a great deal of online sports gambling going on in Minnesota right now,” Frentz said.

The bill is similar to one the committee approved last year, Frentz said, with its building blocks still the same. The new legislation allows for the following tribes to hold a sports betting license:

• The Fond du Lac Band
• The Grand Portage Band
• The Mille Lacs Band
• The White Earth Band
• The Bois Forte Band
• The Leech Lake Band
• The Red Lake Nation
• The Upper Sioux Community
• The Lower Sioux Indian Community
• The Shakopee Mdewakanton Sioux Community
• The Prairie Island Indian Community

Online sports betting platform providers will be required to hold a license to operate in the state. Operators will be required to pay a licensing fee of $250,000, with license renewal fees coming in at $83,000.

The legislation sets the state online sports betting tax rate at 22% of sports betting revenue. The bill earmarks sports betting revenues as follows:

• 1% for grants promoting integrity and participation in amateur sports
• 50% to the commissioner of revenue for charitable gaming purposes
• 15% to racing economic development for the state horse racing industry
• 15% to the sports betting equalization fund for tribes who do not participate in the online sports betting industry
• 15% for grants to promote tourism, sports, and events, such as large-scale sporting events, to the state
• 4% to the commissioner of human services for responsible gaming purposes

The biggest difference between the bill this session and the one introduced last year? Frentz said it’s the prediction markets themselves.

“What has changed substantially is the prediction markets and the explosion, their words not mine, in the year since we’ve heard this bill in this committee last time.”

Andy Platto, Executive Director of the Minnesota Indian Gaming Association, said the association continues to support a regulated Minnesota sports betting market that supports MIGA’s nine tribal members.

“We’ve always had to guess about the size of the unregulated market, but we’re starting to measure it with stock and tax filings of companies currently allowed to operate in the state. That is a frustrating new reality for MIGA tribes, who stand by their commitment to offer the activity responsibly and under state rules, something current operators who advertise as legal certainly do not,” he said.

Scott Ward, representing the interests of DraftKings, FanDuel, BetMGM, bet365, and Fanatics Betting and Gaming for Orrick Harrington & Sutcliffe, demonstrated just how easy it is for consumers to access unregulated markets in the state, showing committee members how he could deposit money into an offshore sports betting platform with an out-of-state credit card and bet on tonight’s Minnesota Twins matchup against the Boston Red Sox.

“A vote to not legalize sports betting is not going to stop those harms. Those harms are already here, they’re already happening in this state, so legalizing sports betting would mitigate those harms. Not legalizing sports betting would just simply let those harms go completely untouched with no help whatsoever,” Ward said.

Rasmusson criticized the proponents of the bill, noting that research has shown that a regulated sports betting or gaming market does not decrease gambling addiction rates or harms in a state.

In fact, Rasmusson said, it does the opposite. He pointed to a 2025 study conducted by the UCLA Anderson School of Management, which concluded that the personal finances of individuals in states with legalized sports betting or iGaming have suffered.

In states with legalized online sports betting, the likelihood of personal bankruptcy filing rose by 25% to 30% in the years after legalization, debt collection amounts rose by 8%, and credit card scores declined by 2%, according to the state.

“When you legalize online gambling, you just get more gambling. You get more problem gambling and the illegal markets do not go away,” Rasmusson said.