It’s Now Or Never For Minnesota Sports Betting

The push for Minnesota sports betting legalization is expected to resume in earnest now that the state legislature is reconvening. If efforts yet again fail, though, it could be all she wrote for the future of sports betting in Minnesota.

This sounds hyperbolic, verging on dystopian. Perhaps it is. But key officials and stakeholders no longer seem as optimistic about the current state of affairs. There is clear interest among policymakers in discussing the expansion of gaming laws. That is why said expansion gets discussed ad nauseam, year after year.

Yet, where Minnesota sports betting legalization once seemed inevitable, leverage in discussions is shifting. It used to lie with state officials and tribes. Which makes sense. Tribes have rights to gaming exclusivity under the current setup and are seeking to retain it if sports betting gets the green light. This stance has not sat particularly well with those who prefer widespread online sports betting in the United States. They believe that allowing retail sportsbooks into the market brings more tax revenue and better optimizes safety regulations.

There is merit to this school of thought. Tribal sports betting can amount to limited access. Unless they have a Minnesota sports betting app that can be accessed from anywhere in the state, people need to be within driving distance of brick-and-mortar locations to place their wagers. That isn’t the case for everyone. And even those within close proximity of a sportsbook may prefer the ease of betting on sports online. This can lead them to seek out top offshore betting sites, or more recently, to explore prediction markets.

As it turns out, the latter has many wondering whether this could be the last time Minnesota seriously considers sports betting legalization.

Tribal Lobbyist Says Prediction Markets are Changing the Minnesota Sports Betting Calculus

Speaking with CDC Gaming’s Buck Wargo, tribal lobbyist Andy Platto outlined how prediction markets could be impacting the future of Minnesota sports betting:

“‘Tribes are under threat from tons of illegal gambling products and at this conference, tribes took notice and started fighting back,’ Platto said, adding he’s speaking for himself and not the state’s tribes. ‘I’m very concerned. Prediction markets are taking sports bets, and sweepstakes are icasinos in another name. And icasinos are illegal in Minnesota…This is the first time a sports betting provider has a legal product for Minnesotans to bet on the line and spread and totals. They’re picking off the states that don’t have legal sports betting markets.’”

While Platto’s frustration and concern aren’t an official stance for the tribes, we can’t imagine they feel any differently. Other sports betting providers in the United States feel the same way about prediction markets. They see it as a direct infringement of their industry, with insufficient distinction.

Still, the default defense for prediction markets continues to hold serve. They argue they are subject to regulation from the Federal Trade Commission, not unlike the stock market, rather than state oversight. Classifying their transactions as trades rather than bets allows them to operate in every state–regardless of sports betting laws. Some states and operators are fighting back. Multiple motions have been filed against companies like Kalshi and Polymarket. Yet, extricating prediction markets is so far proving difficult. Even in places with pending legislation, these companies are allowed to continue their operations.

All of which clearly leaves tribes with a sense of urgency. This is no longer about them missing out on revenue. It is about prediction markets establishing a sports-based clientele they’ll be hard-pressed to poach if and when Minnesota’s gaming laws change.

Here’s How Prediction Markets Could Stymie Sports Betting Legalization

Despite the enduring uncertainty surrounding Minnesota’s sports betting timeline, Platto seems to believe tribes and other gambling supporters have a critical argument on which to rest their hopes.

“No one wants to use prediction markets when there’s a legal sports betting product,” he tells Wargo. “That’s why the legislature needs to pass the bill—to get rid of this illegal market and have a legal regulated market with gaming protections and resources for the state.”

This is sound logic. Statistically speaking, it’s also true. Sportsbooks are not reporting a significant loss in business amid the prediction-market rise.

Here’s the problem: This data speaks to markets that already have legal sports betting. There is not enough evidence that sports betting can follow prediction markets and hold a significant advantage. In fact, it’s impossible to have that data. Prediction markets didn’t reach the mainstream until the past two years or so, if even that long. With so many states having already legalized sports betting before 2024, those places aren’t as subject to being undermined by prediction markets.

Think of it this way: Newer sportsbooks have a hard time procuring market shares from entrenched properties like FanDuel, DraftKings, BetMGM, etc. Companies like Kalshi and Polymarket will struggle to do the same. But what happens when you flip the script? What happens when Kalshi and Polymarket are providing services before sportsbooks? It stands to reason the same effect will play out in reverse, with sportsbooks struggling to drum up enough business. This is especially true when you consider the legal sports betting age is 21, while prediction markets only require you to be 18.

Minnesota has Reached an Inflection Point

Complicated still, the Minnesota sports betting scene would be uniquely vulnerable to prediction markets. The latter can be accessed from anywhere. At this point, it seems like sports betting in The Land of 10,000 Lakers would only be permitted on tribal property. Ergo, prediction markets are not only going to be the longer-standing customer service product; they’re going to be more accessible, too.

Minnesota can increase the sports betting profile by looking at a wider-scale online release. Even then, though, they have to wonder how badly sportsbooks want to enter the state now. Yes, there will be plenty of takers. But companies like FanDuel and DraftKings have already launched their own prediction markets. Will they forgo looser regulations to apply for sports betting licenses if and when Minnesota has a change of heart?

All of the questions posed here lack clear answers. The prevailing notion, though, is the longer Minnesota sports betting legalization takes, the tougher it will be to rival prediction markets. Short of them being deemed illegal sports betting, if the state fails to make headway during the current legislative sessions, we may find that the push for legalization loses steam altogether.

Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: