Optimism Growing as Minnesota Sports Betting Inches Forward

Progress in the never-ending debate over Minnesota sports betting has been hard to come by. However, a new agreement backed by local native tribes, important lawyers, and support groups, has inspired confidence that legalization could occur this year.

Rep. Zack Stephenson (DFL-35A) spearheaded a deal in the Senate that increased the tax rate from a previous sports betting proposal from 10 to 20 percent. The extra 10 percent will be directed to small charities, a deal that Allied Charities Minnesota said it would be willing to support.

38 states, including all of Minnesota’s neighbors, already legalized sports betting. Legalization would provide an economic boost by ensuring gamblers don’t have to travel out of the state to place their bets.

Stephenson said that the key to passing a sports betting bill will be support from both parties and all relevant groups. Previous attempts proved divisive if they received support at all. 

“I think momentum is building, I think we have a great chance,” Stephenson said. “It's a difficult bill because gambling bills by their nature have to be bipartisan, there are Democrats and Republicans who will never vote for it. So you have to assemble a broad bipartisan coalition and these days that is very difficult, but momentum is building.”

A proposal last year had the backing of the tribes but none from retail locations such as bars and restaurants.  That’s because the proposal would have prohibited electronic pull tab games at those locations.

Pull tabs have been controversial on their own since they resemble slot machines and Minnesota native tribes were granted sole control of the state’s gambling market.

The charities also have a vested interest in electronic pull tabs as they received roughly $40 million per year from these games. Those loose ends ultimately meant the proposal stagnated and eventually died before being signed into law. 

The extra 10 percent tax in the new proposal will ensure the charities still receive their usual funding. Stephenson also added $40 million in tax relief for the charities and wrote in an amendment to a separate filing to allow Daily Fantasy Sports and pick’em games on Thursday as both proposals continue to evolve. 

While there is more support for sports betting than there was previously, there are still many legislators who oppose Stephenson’s plan.

Sen. John Marty (DFL-40) wrote in an editorial in the Star Tribune last week that sports betting is a “risky bet” because of its potential to breed a gambling addiction. That’s significant since Marty is the chairman of the next committee that will receive the bill. 

Stephenson said that he is also concerned that the implementation of legal sports betting sites could drive problem gambling but believes that the state would be able to address it more accurately and on a broader scale. 

“I share the concern about problem gaming, and I think everyone should… it’s a very serious issue,” Stephenson said. “Fundamentally, we should not be of the belief that just because it is illegal, it’s not happening every day. The right approach to this very serious public health problem is to regulate and address it with appropriate resources, and not just stick our head in the sand and pretend it doesn’t exist.”

Republicans have also taken issue with the lack of attention paid to the state’s horse racing industry. Officials want both of the state’s tracks to be granted sports betting licenses or more revenue after being capped at $600,000 annually.

Both proposals floating around would give full exclusivity over sports betting to the state’s 11 tribes, a plan supported by local professional sports teams. The Senate bill, which contains the 20 percent tax rate, also bans live betting, which may prove to be another stumbling block for gambling proponents.