30-second summary
- Seven tribes operate 11 gambling facilities in Minnesota
- They initially opposed the legalization of sports betting
- Bill 1894 will be considered in the Senate on March 7, and many believe approval is imminent
- It would allow sports betting at the state’s casinos and racetracks, along with online betting
Road to this point
There has been a lot of talk in Minnesota about legalizing sports betting ever since the federal ban came to an end in May 2018. Many other states obtain significant success following legalization. New Jersey, for example, passed Nevada’s sportsbook revenues for the first time ever for a given month in January 2019.
Minnesota Senator Roger Chamberlain has often spoken about his optimism that sports betting will become legal in 2019 in his state. Chamberlain is the chairman of the Senate Taxes Committee and will play a key role in bringing a sports betting bill to fruition.
Minnesota already has tribal casinos, which generate revenues of about $250m (£190m) annually. These revenues are taxed at 6.75%.
There have been several attempts at drafting sports betting bills. One of them proposed a 1% tax on every sports bet. Naturally, the tax rate would be one of the key discussion points of any such bill.
Tribal conflict
Minnesota has 11 operational tribal gambling facilities. Sports betting has not been of much interest to a lot of tribes across the United States since the ending of the federal ban. This is because of the slim margins and high operational costs of having a sportsbook.
In Minnesota, there is no need for the government to get consent from the tribes to make sports betting legal as there is no exclusive agreement in place as part of the state-tribal compact.
None of the seven tribes seems to have an interest in opening sportsbooks and now it looks as if they are going to oppose a move to allow other operators to do so. The tribes are working with the Citizens Against Gambling Expansion group to try to prevent this from happening.
While the tribes have no direct veto, they do have significant political influence. Senator Chamberlain has expressed his disappointment about this stance but did acknowledge that sports betting could have a negative impact on the gaming revenues for the tribes.
Recent progress on legal sports betting
Minnesota looks to be very serious about sports betting. The state senate is scheduled to consider Bill 1894 on March it. The bill would allow sports betting in casinos and on mobile platforms.
This bill was introduced on February 28 by four Republican senators and a single Democratic-Farmer-Labour Party senator. The 13-page document is very thorough, going into the specifics of everything from zoning laws to tax rules.
It would allow tribal casinos and racetracks to offer sports betting at their facilities. It would also be legal for them to set up online or mobile sports betting, allowing bettors to place their wagers from anywhere in the state.
Those who are at least 18 years old would be able to place sports bets. Both college and professional sports bets would be allowed and there would be virtual sports wagering restrictions.
The bill proposes the same net revenue tax of 6.75% that already applies to the casinos. There is no indication as to what a license will cost. If the bill does become law, it would not take effect until September 1, 2020.
Chance of approval?
It is believed that this bill will not take long to be discussed in the House. Two of its representatives have in the recent past put forth their own sports betting bills.
One of them is Pat Garofalo. Recently, he said on the issue of sports betting: “For too long, Minnesotans wanting to place bets on sporting events have had to rely on an unregulated process. This legislation brings the sports gambling industry out of the shadows and ensures that consumers have the proper protections in place that allow for a fair and transparent experience.”
With the tribes in the state initially being hostile to allowing sports betting, many will be watching closely to see how they react if there is a passage of this bill.