Minnesota lawmakers have introduced legislation to ban online sweepstakes-style casino games, following state regulators' escalation of enforcement against operators offering similar services. The proposed measure would prohibit platforms that use dual-currency systems to simulate casino gambling.
Key Takeaways
- Minnesota legislation would prohibit online sweepstakes games that use dual-currency systems and simulate casino gambling.
- Attorney General Keith Ellison has sent cease-and-desist letters to 14 online gambling operators offering services to Minnesota residents.
- The proposed ban follows similar regulatory actions taken by several other states targeting sweepstakes-style casino platforms.
Senate File 4474, which has five co-sponsors, Senators Jordan Rasmusson, John Marty, Erin Maye Quade, Matt Klein, and Warren Limmer, was introduced and referred to the Senate committee of Commerce and Consumer Protection on March 16.
The measure would create a new section of Minnesota commerce law banning the operation, promotion, or support of online sweepstakes games in the state. Lawmakers defined these games as internet-based promotions accessible through computers or mobile devices that simulate casino-style gambling and use a dual-currency payment structure.
Games with dual-currency systems allow players to buy or earn virtual currency that can be exchanged for cash or the chance to win cash. The regulators point out that this system is very similar to real money gambling, even though it attempts to evade current laws on gambling.
The bill would also extend liability beyond operators. Financial institutions, payment processors, geolocation providers, gaming content suppliers, and media affiliates would all be prohibited from supporting sweepstakes casino gaming platforms operating in Minnesota.
Enforcement authority would fall to the Commissioner of Public Safety and the Attorney General. Officials would be empowered to deny operations to entities that accept revenue derived from sweepstakes gambling activities and to impose penalties for violations.
Minnesota's proposal follows similar legislative and regulatory efforts in other states, including Tennessee and Oklahoma, which have moved to restrict or prohibit dual-currency sweepstakes casino platforms.
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Minnesota enforcement efforts intensify
As lawmakers consider the legislation, Minnesota officials have already taken enforcement action against existing online gambling sites. Last November, Attorney General Keith Ellison sent letters to 14 operators directing them to stop offering gambling services to Minnesota residents.
The targeted sites include social sweepstakes casinos that use virtual coins redeemable for cash or prizes, as well as platforms offering sports betting, poker, and other forms of wagering. Minnesota law currently prohibits most online gambling activities under statutes governing illegal gambling operations.
Prior to the letters, the Alcohol and Gambling Enforcement Division of the Minnesota Department of Public Safety also warned the same operators about potential criminal violations related to online wagering. The June notices requested that the companies stop operating in Minnesota or adjust their business practices to comply with state law.
Officials said the operators did not comply with those requests.
“Online platforms offering sportsbooks and casino games run by out-of-state and overseas operators may make it look as though online gambling is legal and safe in Minnesota, but let me be clear: it is not,” Ellison said in a statement.
“Trying to rebrand poker chips as virtual currencies does not change the fact that these online gambling operations are unlawful. By continuing to operate online gambling sites in Minnesota, these operators are likely openly defying our State’s laws and I will not stand for it.”
