A deal initially struck between the Indian band that runs Mystic Lake Casino and the neighboring Canterbury Park racetrack is on its way to Gov. Mark Dayton.
The measure would allow 30 more card tables at the state's largest horse track, as well as simulcast horse racing at the state's tribal casinos.
The House passed the measure by a wide margin Monday, after the Senate passed the deal over the weekend.
The bill is a first-of-its kind agreement, said Rep. Tim Kelly, R-Red Wing.
"The largest job provider in Goodhue County is Prairie Island, and Treasure Island casino," Kelly said. "I understood that, and I did not want to have an adverse effect on our county by promoting racino.
"Here was an opportunity for these two sides to come together, and work towards a goal where they could both be beneficial. So, I would say it's historic."
One of the bill's sponsors. Rep. Joe Hoppe, R-Chaska, said, "I think that, in the long run, we're going to see this help the horse racing industry. People have been gambling; they are going to continue to gamble at the casinos.
"What this really means is more money for purses and more money for horses and you had a lot of people on both sides of the aisle out on the floor, this is going to mean more money for equine industry in the state of Minnesota."
The deal follows an agreement by Canterbury Park to drop this year's quest for slot machines at the track. But supporters say they may return to push for racinos at the Capitol.
Racino supporters, like Rep. Mike Beard, R-Shakopee, say they are disappointed with the compromise.
"Canterbury Park can't even change the paper towels without coming down here for permission," Beard said. "The fact that we granted them 30 whole new tables. Why is that our business in the first place? Let them have a business. If they want to have a successful race track, let them run a race track. Let them have gaming down there to support the endeavor."
Opponents of the measure cited a recent story in the New York Times which said that increased gambling at horse tracks raises the risk that more horses could be injured or killed as they run for higher stakes.
Republican Claire Robling of Jordan sponsored the bill in the Senate. She says it addresses the issues of whether higher stakes will put more horses at risk.
"It will require a reduction in the amount of medication that the trainers and owners are giving their horses, that can potentially mask injuries, that will let horses run that shouldn't be running," Robling said. "So this is addressing that very issue."