Minnesota lawmakers are advancing legislation that would explicitly prohibit esports prediction markets. Residents would then be left with no legal way to wager on events as the state’s efforts to legalize sports betting stalled again.
The Minnesota Senate passed bill SF4511 last week. It has now been assigned to the House Commerce, Finance, and Policy committee.
It would prohibit prediction markets on any athletic events, esports, elections, weather, war, death, and legal cases, among others.
It defines esports events as “a competition between individuals or teams using video games in a game, match, contest, or series of games, matches, or contests, or a tournament, or by a person or team against a specified measure of performance which is hosted at a physical location or online.”
If passed, a ban on wagering on the events at prediction markets would come into force in August.
Esports Prediction Markets Growing In Popularity
The bill comes amid a rise in prediction markets offering wagering on esports events. Sites such as Kalshi and Polymarket offer a wide range of both pre-match and live events across all major competitions.
The platforms are increasing their user base, particularly in states that have not yet officially legalized sports betting, such as Minnesota.
As they grow in popularity, esports organizations are taking note, and BLAST announced a new partnership with Polymarket earlier this year.
Yet the growth is coming with increased efforts from states to drive out the companies, which do not pay taxes in the same way as regulated gambling companies.
There are ongoing legal cases in at least 20 states as gambling regulators, tribal groups, and users challenge the legality of sports prediction markets.
As yet, Minnesota has not taken any enforcement action against operators. However, if this legislation passes, it would empower state authorities to send cease-and-desist letters and to bring legal actions in district courts.
Minnesota Rejects Expanding Legal Gambling
Lawmakers in Minnesota had proposed relaxing the state’s strict anti-gambling laws. It is one of the few remaining states in the US that does not allow either retail or online sports betting.
A bill introduced in March would have allowed the state to issue up to 11 licenses for companies to launch mobile sports betting.
However, the legislation stalled in the Senate amid a lack of desire to open up the state’s betting industry. Sen. Erin Maye Quade called it a “predatory industry” and said maintaining the illegal status of sports gambling is protecting the integrity of sports in the state.
In addition to advancing legislation to ban sports prediction markets, the Minnesota Senate also approved a bill banning online sweepstakes that allow users to gamble using dual currencies. Lawmakers have until May 18 to approve any changes to the law, at which time the legislative session will end for another year.