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Minnesota Sports Betting Hopes Still Alive Despite Opposition

Minnesota Sports Betting Hopes Still Alive Despite Opposition article feature image

Harrison Barden/Getty Images. Pictured: Karl-Anthony Towns.

A bill that would legalize retail and online sports betting in Minnesota is moving  along after narrowly clearing a House committee.

After exceeding allotted debate time during a morning hearing, the House Committee on Government Finance & Elections reconvened Tuesday evening and advanced HF 778 on a 7-5 vote. The bill—which would direct tax revenue from betting to youth sports and gaming addiction—now heads to a Judiciary committee, where it could face even tougher opposition before a full House vote.

It’s the farthest a sports betting bill has made it through the North Star state.

Previous attempts to legalize sports betting in Minnesota have fallen flat largely due to lack of support from the state’s 11 tribal casinos. This go-around, the bill gives them a de facto monopoly on online sports betting.

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Tribal Monopoly

The bill would create two master mobile licenses to be split between two groups of tribes, allowing them to partner with commercial operators like DraftKings or FanDuel.

It’s an offer they couldn’t refuse.

“Tribal leaders hope to soon be as comfortable with he details as they currently are with the general framework,” testified Andy Platto, executive director of the Minnesota Indian Gaming Association testified. “HF 778 in its current form recognizes that tribes as the states gaming experts are in best position to operate Minnesota’s sports wagering market.”

Rep. Jon Kaznick (R), who voted against the bill, questioned why racetracks weren’t included in the group eligible for licenses.

“This is the biggest change to our gambling laws in 40 years, so it makes sense to not open our doors to everybody,” bill-sponsor Rep. Zack Stephenson (D) said.

A similar bill pending in the Senate would allow racetracks to apply for licenses, though tribes are unlikely to support a version that cedes control to anyone else.

Sam Krueger, executive director of the Electronic Gaming Group echoed Kaznick’s concerns, saying the bill “picks winners and losers in this industry”.

“We are not against sports betting,” Krueger said. We are against bills that allow our chief competitors, the tribes, to vastly expand outside of their existing jurisdictions without allowing the charities a reasonable path to compete and grow going forward.”

Reps. Jim Nash (R) and Duane Quam (R) echoed Kaznick’s concerns that more tribal control could hurt charitable gaming competitors.

Opposition Going Forward

Tax rates and license fees haven’t been set yet, though Stephenson said he wants to keep the tax rate as low as possible to encourage migration from the black market.

The bulk of tax revenue will go towards youth sports and problem gaming.

“I think that is meant to tantalize legislators,” said Nash, one of the four Republican lawmakers who voted against the bill.

The bill could face an even tougher path as it leaves the Democrat-controlled House and enters the Republican-controlled Senate, which has historically been resistant to gaming expansion.

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