The inclusion of a controversial amendment Thursday has posed a major obstacle for the future of Minnesota sports betting.
After a 90-minute meeting of the Senate Finance Committee, Minnesota sports betting bill HF778 was moved by a 5-4 vote. It now is placed in General Orders, which is a list of bills that have passed all necessary committees and could be taken up by the Senate for debate and final passage.
In a letter sent by Minnesota Indian Gaming Association (MIGA) Executive Director Andy Platto to the 10-member committee on Wednesday to clarify its current position, the association stated “that nine of the 10 MIGA tribes offer their full and active support for the current version of the HF778, while one member of the Association does not. If amended by the A-22 amendment, which expands commercial gaming, all 10 MIGA tribes would then oppose the legislation.”
What Does A-22 Amendment Mean?
That A-22 amendment was allowed in. It permits the state’s two horse racetracks (Canterbury Park in Shakopee and Running Aces in Columbus) to apply for sports wagering licenses.
That means the bill — which is in its sixth engrossment and isn’t expected to be passed before the legislative session ends on May 23 — has a big hurdle to overcome.
Another main issue in the Senate is the monopoly Minnesota’s tribes would have in holding all 11 of the state’s sports betting licenses, instead of splitting them with racetracks and professional sports venues.
There are a couple of days remaining to work out some kind of compromise, but all indications are that the divide is too wide to bridge. It looks as if sports betting bills will need to be reintroduced in 2023.
Bill Passed House Last Thursday
The bill, which was introduced by Democratic-Farmer-Labor Party Rep. Zack Stephenson, passed through the Minnesota House a week ago by a 70-57 margin.
Minnesota’s sports betting bill includes a 10% tax rate, with some proceeds going to the state’s general fund and to help treat problem gambling. The rest would be used to aid youth sports in communities with high rates of juvenile crime.
If the bill is passed and signed into law, the market would target a launch date of July 1, 2023. Research by the House projects $5.3 million in tax revenue during the 2024 fiscal year. It would rise to $12.2 million the next year.
The House also added amendments last Thursday to the bill. They include limiting advertisements for mobile sports betting and addressing problem gambling.
The Minnesota Catholic Conference had announced earlier this year that it was going to make stopping mobile sports betting a top priority.
Other Issues in the Bill
Tax rate always seems to be a contentious issue when states look to legalize sports betting. Minnesota is no exception.
Liberal House members believe that the rate is too low, while conservatives thought it was too high.
Most states land with a tax rate between 10% and 20%, often with different percentages on mobile and retail sports betting.
During a House Ways and Means Committee hearing in April, Stephenson said the state chose a lower rate to keep those wagering on the “black market” above board going forward.
“We have a huge black market in Minnesota — there’s $2 billion in Minnesota every year spent on this and none of that money goes to problem gaming,” Stephenson said at the time. “It doesn’t mean that people don’t have a problem gaming. They do under our current system. So we need to be honest that this is a real problem that needs to be addressed.”
However, after Thursday’s Senate committee meeting and the amendment adding wagering at horse racing facilities, the tax rate issue might not even come up until next year.