Sports Betting Legislation Moves Forward in Minnesota

It's been difficult for Minnesota legislators to move forward with any meaningful sports betting legislation. Most efforts have been squashed because the state's Indian Tribes have been unwilling to give up their rights to control gambling in the state.

After two-plus years of legislative battles, it appears there could be meaningful legislation on the horizon. It comes in the form of HF 2000 from House Representative Zach Stephenson and SF 1949 from State Senator Matt Klein. Both of these pieces of legislation were introduced to the press and Minnesota residents at a press conference on February 21, 2023.

For Stephenson's part, he intends to start working on his bill in the House Commerce, Finance, and Policy Committee, a committee which he leads as the Chair. Discussions on Klein's bill will also start on the Senate floor.

About These Two Pieces of Legislation

Since both these pieces of legislation mirror one another, the language in each is very similar. In both cases, the state's Indian Tribes would get substantial control over Minnesota's sports betting community. The Minnesota Indian Gaming Association has given a preliminary endorsement to these pieces of legislation, pending a review of the final language put forth in each bill.

Since the devil is in the details, here are some of the key provisions that have been laid out in HF 2000

• A total of 11 online/mobile sports betting licenses would be issued (one per Tribe
  
• Retail sports betting could be offered at all 19 of the state's retail Indian-owned casinos
  
• Online/mobile licensees would need to pay an annual licensing fee of $2,125
  
• Online mobile operators would be required to pay the following: a $6,000 application fee, an initial three-year license fee of $38,250, and a renewal license fee of $25,500
  
• A 10% tax rate on online/mobile gross sports betting revenue with no taxes charged on retail bets
  
• Wagering on in-state college teams would be permitted
  
• All sports bettors must be 21 years old or older
  

All sports betting revenue would be distributed as follows:

• $2.7 million allocated to the Commissioner of Public Safety
  
• $1.3 million allocated to the Commissioner of Revenue as an admin fee
  
• 50% of the remaining revenue would go to problem gambling initiatives
  
• 50% of the remaining revenue would go to youth sports leagues
  

Note: The Senate bill does offer some additional provisions related to the state's professional sports franchises and race tracks getting access to offer retail sports betting on their properties. These are the only provisions that remove exclusivity from Indian Tribes to control sports betting.

There is a long way to go before either of these bills will become a reality. It will require that the Governor ink new compacts with each of the Tribes. Subsequently, the Department of the Interior would have to approve the new compacts.

With a lot of hurdles that need clearing, it's clear getting either of these bills passed will be a challenge. That's especially true in the Senate where the horse racing industry doesn't get much support.