Minnesota Sweepstakes Casino Ban Fails to Advance as 2026 Legislative Session Ends

A proposed ban on online sweepstakes casinos in Minnesota quietly collapsed when the state's 2026 legislative session concluded on May 18 without further action on Senate File 4474. The bill had passed the full Senate on April 30 but stalled after a House committee assignment on May 4, leaving no runway before the session deadline. 

Filed in mid-March, the bill arrived late in a session that began February 17, forcing supporters to move it through the Senate on a compressed schedule. The Senate Commerce and Consumer Protection Committee approved it in late March after hearing from both tribal gaming representatives and sweepstakes casino industry advocates. 

Supporters argued sweepstakes casinos effectively operate as unlicensed real money online casinos outside Minnesota's regulatory structure. Opponents warned the bill's language was broad enough to ensnare legitimate promotional sweepstakes and loyalty reward programs used by large consumer brands.  

The legislation also extended responsibility to financial institutions, payment processors, geolocation providers, gaming content suppliers, and media affiliates that support sweepstakes casino platforms. 

The bill passed through four Senate committees, earning unanimous approvals from the Judiciary and Public Safety Committee and the State and Local Government Committee. Lawmakers voted to waive a procedural cutoff to keep it alive. A special session remains theoretically possible but requires a gubernatorial call, and Gov. Tim Walz has shown no indication of pursuing one.  

Minnesota now joins Maryland, Virginia, Florida, Massachusetts, Hawaii, and Mississippi as states where sweepstakes casino legislation fell short in 2026. 

Federal government takes Minnesota to court over prediction market ban 

Gov. Walz was involved in a separate gaming dispute just days before the sweepstakes bill expired. On May 18, he signed the country's first state law explicitly banning prediction market apps, prompting an immediate federal lawsuit. 

The legislation targets platforms such as Kalshi and Polymarket, which allow users to wager on the outcomes of sports events, elections, weather, and other real-world events. Creating, operating, or advertising a prediction market in Minnesota now carries felony charges with penalties of up to five years in prison and a $10,000 fine. Individual bettors are not subject to criminal liability.  

The law takes effect on Aug. 1. 

The Commodity Futures Trading Commission (CFTC) filed a lawsuit in a federal district court in Minnesota the following day, seeking to block the law before it goes into effect. The regulator argued that the state overstepped into the regulatory space that the agency claims as its exclusive domain.  

The lawsuit also flagged the law's treatment of weather-related event contracts as a specific risk to Minnesota's agricultural sector, which uses those instruments to hedge financial exposure. 

The case reflects a broader and unresolved standoff between state governments and the federal government over jurisdiction. Legal experts have noted that without a definitive ruling, the dispute over who governs prediction market platforms could ultimately require the Supreme Court to settle.