30-second summary
- Minnesota lawmakers hope to make sports betting legal in 2019
- Numerous draft bills have been proposed, but not much progress has been made
- The tribes in the state are not interested in opening sportsbooks
- They will actively oppose attempts to allow sports betting at commercial facilities
Road to sports betting legalization
Minnesota Senator Roger Chamberlain has been optimistic that sports betting will be legalized in 2019. He is the chairperson of the Senate Taxes Committee and has been playing a key role in developing a sports betting bill.
This is now under consideration in the 2019 legislative session. While Chamberlain knows that tweaks will be needed, he is confident that it will pave the way for legal sports betting in 2019.
Since the ending of the federal ban on sports betting in May 2018, many states have made sports betting legal. Many more are in the process of doing so in 2019 and Minnesota does not want to fall behind.
The casinos in Minnesota bring in about $250m (£194m) each year. That revenue is taxed at 6.75%. The tax rate for legal sports betting will be a big point for discussion.
Previous draft bill
A previous draft bill proposed a 1% tax on each sports bet. Proponents said that this would be significant if the estimates for sports betting figures met expectations. The tax rate needs to be seriously discussed because if it is set too high, it will be a disincentive to operators. If it is too low, the state will not be getting enough benefit to balance the social cost.
Some people are happy to leave control of the sports betting sector in the hands of the Gaming Control Board. However, others want a new regulatory body to look after these matters. Mobile sports betting will be included as part of any future bill.
Tribal gaming in Minnesota
There are 11 tribal gaming facilities in Minnesota. Not many tribes around the country have opened sportsbooks since the ending of the federal ban. Operating a sportsbook requires a lot of resources. It also does not offer great margins for the operators.
The state-tribal compact could stand in the way of sports betting. It was one of the first compacts of its kind in the country and allowing sports betting will probably require negotiation.
Under current rules, though, the government doesn’t have to get tribal consent to offer sports betting to non-tribal operators because there is no exclusive agreement. It looks as if none of the tribal facilities in the state are looking to open their own sportsbooks at the moment.
What problems lie ahead?
Seven tribes operate the 11 tribal gaming facilities. Unusually, they seem to be joining together to oppose sports betting legalization. They are part of a group that includes Citizens Against Gambling Expansion, an organization concerned with the downsides of gambling.
The chairperson for the Minnesota Indian Gaming Association (MIGA) sent a letter to Governor Tim Waltz and four of the legislative leaders. This letter says that none of the tribes in the state have an interest in offering sports betting and went on to say that they will oppose any legislation allowing commercial facilities to offer sports betting in Minnesota.
While they have no direct veto, the tribes certainly hold a lot of influence. Chamberlain has expressed disappointment in the position of the tribes. However, he understands that they will have worries about gambling expansion negatively affecting their current offerings.
MIGA’s letter went on to say: “While there is a desire by some to consider this matter during the present session, it seems that the public interest would be best served first by careful study of sports betting’s implications in this state, examination of other states’ experiences where sports betting has been legalized, and thorough consultation with the large number of stakeholders interested in it.”
