Purpose

• The bill aims to prohibit certain wagers and activities related to prediction markets and to establish criminal penalties for those prohibitions. It also updates Minnesota law by amending sections 609.75 and 609.76.

Main Provisions

• Add a new subdivision to Minnesota Statutes that creates criminal penalties for prohibited wagering connected to prediction markets.
• Amend Minnesota Statutes 2024, section 609.75 subdivision 3, to clarify what counts as “not bets.” The bill retains and enumerates several exemptions, including:
  • a contract to insure, indemnify, guarantee, or compensate another for harm or loss, even if the loss depends on chance
  • a contract for the purchase or sale at a future date of securities or other commodities (with an exception noted for a specific provision in 609.76 subdivision 9)
  • offers of purses, prizes, or premiums to actual contestants in bona fide contests for determining skill, speed, strength, endurance, or quality, or to bona fide owners of animals or property entered in such contests
  • the game of bingo conducted in compliance with Minnesota bingo statutes
  • a private social bet not part of or incidental to organized gambling
  • the operation of equipment or the conduct of a raffle under the organized gambling statutes by a licensed organization or an organization exempt from licensing
  • parimutuel betting on horse racing when conducted under the horse racing chapter
  • the purchase and sale of State Lottery tickets under the State Lottery chapter
• These provisions together define what activities are not considered bets, while the new penalties target prohibited prediction-market wagering.

Significant Changes to Existing Law

• Creates criminal penalties for certain prediction-market wagering activities, adding a new subdivision to the statute (609.76).
• Clarifies and expands the list of activities that are explicitly not considered bets under 609.75 subdivision 3, including various forms of contests, social bets, licensed raffles, and specific gambling activities like bingo, parimutuel horse racing, and state lottery operations.
• Aligns and cross-references related statutes (e.g., chapters on horse racing, gambling control, bingo, raffles, and state lottery) to delineate permissible activities vs. prohibited prediction-market related wagers.

Implications and How It Works in Practice

• If a person or organization engages in certain prediction-market wagers or related activities, they could face criminal penalties under the new 609.76 subdivision.
• Wide range of common or traditional activities remain exempt from being treated as bets, provided they meet the conditions listed in 609.75 subdivision 3 (e.g., bona fide contests, licensed raffles, social bets, and specific forms of gambling conduct).

Examples of Exempt Activities (Not Bets)

• Private social bets between individuals not part of organized gambling
• Bingo conducted under the listed state statutes
• Bona fide skill-based contests with prizes
• Raffles run by licensed or exempt organizations
• Parimutuel horse racing under the appropriate chapter
• State Lottery purchases

Potential Areas of Impact

• Prediction-market operators and participants
• Organizations hosting contests or raffles
• Gambling-related businesses seeking to classify activities as non-bets
• Law enforcement and prosecutors enforcing criminal penalties for prohibited wagering

Relevant Terms - prediction markets - wagers - bets - not bets - criminal penalties - Minnesota Statutes 2024 - 609.75 subdivision 3 - 609.76 (new subdivision) - bona fide contest - skill-based competition - bingo - raffles - parimutuel betting - horse racing (chapter 240) - State Lottery (chapter 349A) - securities - futures contracts - private social bet - Gambling Control Board - sections 349.11 to 349.23 - sections 349.11 to 349.22 - section 349.166 - chapter 349A