JRLC Testimony Against Online Prediction Markets

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Dear Chair Marty and members of the Senate Finance Committee,

I am writing on behalf of the Joint Religious Legislative Coalition in support of SF4511(Marty), which would ban prediction markets in Minnesota. The Joint Religious Legislative Coalition (JRLC) is a state- wide coalition formed through the partnership of our three sponsoring faith organizations: the Minnesota Catholic Conference, the Jewish Community Relations Council of Minnesota and the Dakotas, and the Minnesota Council of Churches. As people of faith, we advocate alongside our neighbors of differing religious backgrounds to address poverty, uphold the dignity of overlooked communities, and mitigate societal harm.

Online gambling is not legal in Minnesota; however, prediction markets offer a loophole for unregulated online gambling and sports betting in Minnesota. Trading can take place on an incredible range of outcomes, from whether a ceasefire would be reached between Iran and the United States by the end of March, to whether the price of a can of Arizona Iced Tea will increase this year. The ability to bet on basically any outcome, combined with the online nature of these markets, provides nearly unlimited opportunities to wager and lose significant amounts of money. This presents a significant danger to those at risk of developing compulsive gambling behaviors, particularly young people. Recent studies show that approximately 6% of college students have a serious gambling problem.

Prediction market companies understand the susceptibility of young people, specifically young men, to falling prey to this thinly disguised form of online gambling. Companies intentionally target platforms and spaces frequented by teenagers and young adults, like online live streaming platforms and social media, for advertising. There are examples of prediction market companies contracting underage influencers to advertise their markets to young audiences. Numerous lawsuits and regulatory actions have identified the predatory practices of these markets, and we know who they are preying upon.

The most well-known prediction market, Kalshi, recently indicated that they plan to block athletes, coaches, and officials from trading on their sports and to block political candidates from trading on their campaigns. This move is essentially a confession that prediction markets themselves are not confused regarding the service they provide—online gambling and sports betting

We urge you to vote to ban prediction markets in our state. Thank you for your consideration of SF4511.

Sincerely,

Leah Patton
Executive Director, Joint Religious Legislative Coalition