The state of Indiana has moved to officially outlaw sweepstakes casinos in the state, becoming the latest to ban the practice in the U.S. In Minnesota, sweepstakes casinos and prediction markets are in the crosshairs of a pair of bills introduced by a group of senators.
Sweepstakes-style online casinos, which use promotional currencies redeemable for cash prizes, face increasing scrutiny across the United States as regulators argue they circumvent traditional gambling laws.
Social Gaming Leadership Alliance (SGLA) remains positive on Indiana
HB 1052 was signed into law by Minnesota Governor Mike Braun on Thursday last after it had passed the House by 87-11 on 2nd February and the Senate on 18th February by 37-8. It means that any infringement could result in a six-figure civil penalty from the Indiana Gaming Commission.
However, despite the law advancing through the courts, the SGLA remains optimistic that the state will revisit the issue with a focus on creating a regulatory framework.
Sean Ostrow, Managing Director at the SGLA, said in a statement: “We are disappointed that HB 1052 has become law, but are grateful to the many Indiana lawmakers who engaged thoughtfully on the merits of regulating this long-standing industry.
“Despite the outcome, the legislative record shows meaningful bipartisan support for a smarter approach that embraces innovation and economic growth.
“We look forward to continuing to work with Indiana lawmakers on a regulatory framework for digital entertainment that protects the hundreds of thousands of Hoosiers that enjoy Social Plus games, while generating tens of millions in annual tax revenue.”
Minnesota to regulate sweepstakes casinos and prediction markets
Meanwhile, Minnesota lawmakers have introduced two bills that would ban prediction markets and sweepstakes casinos as the state again considers legalizing sports betting. The proposals were filed Monday by senators Jordan Rasmusson, John Marty, Erin Maye Quade and Matt Klein and sent to separate committees for review.
One measure would outlaw prediction markets on sports, politics, people and other real-world events. It would also prohibit contracts tied to outcomes of athletic competitions or casino-style contests that award prizes based on skill or chance.
The bill also targets marketing of prediction markets, making it a felony to advertise them as legal in Minnesota or promote them during certain broadcasts. Operators, suppliers and affiliates that continue offering the contracts after a cease-and-desist order could face criminal penalties and a 10-year ban from obtaining a state gaming license.
A separate bill would ban online sweepstakes casinos that use dual-currency systems to simulate gambling. The proposal would make it a felony not only to operate or promote the games but also to provide services such as payment processing, geolocation tools or gaming content. Minnesota is still weighing legalizing sports betting through a tribal-focused proposal that would grant licenses to the state’s gaming tribes.
Bills come after cease-and-and-desist letters sent last November
Enforcement efforts against illegal gambling are ticking up in Minnesota. In November 2025, Attorney General Keith Ellison sent 14 letters to illegal operators, including some sweepstakes casinos, ordering their immediate closure.
Mr Ellison released a statement at the time: “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. Trying to rebrand poker chips as virtual currencies does not change the fact that these online gambling operations are unlawful.”
Minnesota Department of Public Safety commissioner Bob Jacobson added in the press release at the time: “There’s no accountability, no protection for players and no way to know if the betting will be run fairly. Through our Alcohol and Gambling Enforcement division, we will work with the Attorney General to hold these operators accountable, protect Minnesotans and ensure the integrity of Minnesota’s gaming industry.”
Minnesota latest state to target prediction markets
Minnesota joins the likes of New York, Nevada, and Tennessee to move against prediction market platforms as regulators and lawmakers across the country debate whether the products amount to unregulated sports betting. The proposed legislation would make it a felony to offer contracts tied to sports events, political outcomes or other real-world developments.
The effort comes amid growing legal clashes between prediction market operators and state regulators. In Nevada, gaming officials have challenged platforms offering sports-related event contracts, arguing they function as unlicensed sports wagering under state law.
New York regulators have also scrutinized prediction market offerings tied to sporting events, raising questions about whether the products fall under state gambling laws rather than federal financial regulation.
Operators such as Kalshi have argued that their event contracts are financial products overseen by the Commodity Futures Trading Commission (CFTC), not traditional gambling. The dispute has fueled a broader debate over whether prediction markets should be regulated like financial exchanges or treated as another form of online betting.
