Minnesota Sports Betting Update: Amended Bill Approved By Taxes Committee

Minnesota Sports Betting Update: Amended Bill Approved By Taxes Committee
Fact Checked by Nate Hamilton

A bill to legalize Minnesota sports betting continues to be passed around in the state’s Senate as time winds down on the legislature’s 2023 session.

On Friday morning, the Senate Taxes Committee voted 5-3 to approve an amended version of S.F. 1949. However, the bill won’t yet go to the Senate floor as it will now head to the chamber’s Finance Committee.

So far, the bill sponsored by state Sen. Matt Klein has been passed by the Senate’s Commerce and Consumer Protection, Health and Human Services, Justice and Public Safety, State and Local Government and Veterans committees. On Thursday afternoon, the Senate Rules and Administration Committee granted Klein an extension to get his bill passed in the chamber.

The legislative session ends in less than 10 days.

What Amendments Were Added To the Bill?

The Taxes Committee also approved an amendment to the bill adding language to regulate eSports. It also allows sportsbooks to carryover losses in subsequent months to offset taxes.

“This is sort of considered the Minnesota Vikings winning the Super Bowl provision if they all of a sudden lost a windfall during one circumstance,” Klein said.

The amendment also addressed a couple of fiscal issues, including wording regarding the economic development fund for the state’s racetracks.

Klein’s bill does not make the tracks eligible to pursue sports betting licenses. In lieu of that, the bill offers tracks a fund to help them remain viable.

According to the bill, the state will take 30% of the tax revenue generated from sports betting and allocate that to the Minnesota Racing Commission, which will then award grants to the track. However, it will be capped at $3 million annually once that fund reaches $20 million in appropriations.

Running Aces and Canterbury Downs, the state’s two tracks, oppose the bill in its current form.

Tracie Wilson, Running Aces’ CFO, told the committee Friday that they want the $20 million cap removed from the racing fund.

“We believe this gives us the best chances to remain viable, and of course, it is a fairness issue for the tracks,” she said. “The revenues that go to the tribes and to the out-of-state sports betting vendors will not be capped. Why should the tracks be capped?”

Klein has repeatedly said tracks would not receive licenses because the bill is about “historical justice” for the state’s 11 tribal nations. He told the committee the tracks and tribes continue to discuss the fund’s structure.

As it stands, the bill will need bipartisan support because not all of the Democrats, which hold a slim majority in the Senate, support expanded gaming. However, several Republicans have balked at excluding the tracks from participating.

What's Next For Minnesota Sports Betting Bill?

The next stop for S.F. 1949 is the Senate Finance Committee, and during Thursday’s Rules Committee meeting, that panel’s chair had some pointed remarks about sports betting.

State Sen. John Marty told the committee he believes there needs to be more discussion around problem gambling and addiction issues.

“There have been a lot of negotiations between who can be on board and who cannot be on board, but the hearings have been relatively brief in terms of the other impacts,” Marty said. “And the idea that right now, you go to a casino or you go to a track or you go to charitable gambling place and place bets is one thing, but the idea of being able to do it 24/7 on your phone or computer I think that deserves much more intensive consideration.”

If the bill passes the Senate, it would still need to pass the House before it could go to Gov. Tim Walz, who has expressed support for legalizing sports betting.

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Steve is an accomplished, award-winning reporter with more than 20 years of experience covering gaming, sports, politics and business. He has written for the Associated Press, Reuters, The Louisville Courier Journal, The Center Square and numerous other publications. Based in Louisville, Ky., Steve has covered the expansion of sports betting in the U.S. and other gaming matters.