'Effectively allowing online gambling': Minnesota lawmakers move to stop sweepstakes

ST. PAUL, Minn. (FOX 9) - Lawmakers at the Capitol are taking aim at a new wave of online sweepstakes games, raising questions about the future of digital gambling in Minnesota.

Lawmakers target online sweepstakes games

What we know:

Online sweepstakes games have become a multi-billion dollar industry, with American players spending more than $8.5 billion in 2024, according to analysts. These games look a lot like traditional casino games, including slots, blackjack and craps, but they operate mostly online and are often promoted as free to play.

The Minnesota Indian Gaming Association argues that these so-called "sweepstakes casinos" are skirting state gambling laws and operating without regulation. "Sweeps casinos are unregulated and illegal gaming platforms that advertise here every day," said Andy Plato of the Minnesota Indian Gaming Association.

Companies behind these sweepstakes use two types of currency—one that can be purchased and another offered as a free bonus. They often pay out prizes in cash.

Supporters of the ban say the goal is to protect Minnesotans from unregulated gambling platforms while still allowing legitimate promotional sweepstakes. "What we're trying to do is ensure that legitimate promotional sweepstakes can continue in the state of Minnesota while closing a loophole that's effectively allowing online gambling," said Sen. Jordan Rasmusson, R-Fergus Falls.

The other side of the debate

The other side:

Not everyone agrees with the push to ban online sweepstakes. One of the largest sweepstakes operators is run by a Minnesota native, who says his company employs more than 200 people in tech jobs and follows state laws. He argues that banning sweepstakes would be counterproductive.

"If this bill is passed, it will not eliminate this activity. Instead, it'll push Minnesotans to the more than 1,100 offshore operators who hide behind shell companies and don't comply with consumer protections or sweepstakes laws," said Patrick Fechtmeyer, CEO of ARB Interactive.

The debate highlights a broader effort by lawmakers and gambling opponents to address new forms of online gaming, including prediction markets and other digital betting platforms.

The bill to ban online sweepstakes has already passed out of committees in both the House and Senate, and with bipartisan support, it stands a good chance of becoming law this year.

What we don't know:

It is not yet clear when the full House and Senate will vote on the bill or how enforcement would work if the ban becomes law.