Senator Roger Chamberlain is hopeful that a sports betting bill will receive bipartisan sponsorship in 2019 in Minnesota.
The head of the Senate Taxes Committee, he believes that the rough draft they currently have will be the center of discussions once the 2019 legislative session begins on January 8. With a few tweaks, he believes that a bill can pass before the 2019 legislative session closes.
Several different committees will focus on this topic. A lot of key stakeholders are involved in legalization efforts and significant amounts of money will be changing hands. Chamberlain believes that there is significant support for legalization, but that it still will not be one of the top priorities for the 2019 session.
Journey to date
In May, the Supreme Court ended the ban on sports betting in the United States. This gave individual states the power to decide for themselves if they want legal sports betting.
To date, New Jersey, Delaware, Rhode Island, Pennsylvania, West Virginia, New Mexico, and Mississippi have legal sportsbooks, and many more states are on their way to passing their own bills and opening sportsbooks.
Legalization has proved to be a success for many of these states to date because of increased tax revenues that can be used for many social goods.
Going forward in Minnesota
One of the key issues that the legislature will look at is how much revenue Minnesota can expect from sports betting. Nevada is currently the leader in the space with about $5bn (£3.9bn) in sports bets annually.
The take for the casinos is around $250m (£197m), and the state imposes a 6.75% tax on these casino earnings. Therefore, a key consideration is the tax rate on sports betting. One of the draft bills that did the rounds in Minnesota during 2018 suggested a 1% tax on each wager. Representative Pat Garofalo, who sponsored this bill, estimated that Minnesota would see total sports wagers of as much as $2bn (£1.6bn).
It is important to find a happy medium for the tax rate, bringing in enough revenue for the state while not being so high that it encourages people to turn to the black market. Chamberlain is in favor of the current Gaming Control Board taking control of sports betting. However, Garofalo wants a new regulatory body, to be known as the Sports Wagering Commission.
Tribal casinos in the state
There are 11 tribal gaming facilities in Minnesota. Only a couple of tribes in the US have opened up sportsbooks since the ending of the federal ban.
One of the main reasons is that it takes a lot of resources to open and maintain a sportsbook and the returns are not as lucrative as other forms of gambling.
Minnesota’s tribal compact was one of the first in the country, and a renegotiation of the agreement is probably needed to allow sports betting. The state does not need tribal consent before allowing non-tribal facilities to offer sports betting because there is no exclusivity agreement in place.
However, there certainly would be interest from some of the tribes to offer sports betting. Garofalo believes that it is vital for the state to work closely with the tribes on this matter. It is important to have a stable gaming environment.
What about the opposition?
Garofalo’s main focus is curtailing the black market sports betting industry rather than simply raising finances for the state. He would like to see sports betting kept to existing gambling facilities. However, many parties oppose these proposals.
One of the main opposition groups is the Citizens Against Gambling Expansion. They say that a lot of people in the state believe that there is currently too much gaming and no more options are needed.
They believe that sports betting, in particular, carries a lot of significant risks, especially if there is an allowance for mobile and online gambling and that such a move will lead to the targeting of younger people. The group does not think that any bill will be approved in 2019 due to the current uncertainty about the situation.
