Sports betting bill clears first committee, but odds still against it

People watch coverage of the NCAA college basketball tournament.
People watch coverage of the first round of the NCAA college basketball tournament at the Westgate Superbook sports book in Las Vegas in March 2018.
John Locher | AP 2018

The Senate tax committee voted 5-2 Thursday to send a bill that would legalize sports betting to the state government committee — but the bill still faces long odds to becoming law.

It would allow sports betting at Minnesota's tribal casinos and at the state's two horse-racing tracks. It would also allow betting through mobile devices, which would be linked to accounts with the authorized sites.

Sen. Roger Chamberlain, R-Lino Lakes, the tax committee chair and the bill's chief sponsor, said he views sports betting as a business and entertainment.

"We're just trying to create a legal structure around that to legalize it, regulate it, make it safe and accessible to people," Chamberlain said, "so they can invest in their opinions and have some fun."

There are no official estimates on the amount of potential sports gambling activity that would occur under the proposal, but Chamberlain speculated that wagering could top $2 billion a year. His bill would set a 6.75 percent tax on net revenue from sports wagering.

"We're not in this to raise a whole lot of revenue. We want people to take part in a business, a profession and have some fun while they're doing it," said Chamberlain.

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A U.S. Supreme Court decision last year ended a prohibition on sports betting and opened the door for states to craft their own regulations.

Sen. Melisa Franzen, DFL-Edina, raised concerns about Chamberlain's bill.

"Prohibition is not always the answer, and we do have a problem with the black market here, if you will. But to liberally open the floodgates for online or on your phone gambling right now, there's just too much question," said Franzen. "I don't believe the bill goes far enough to restrict or minimize those negative externalities."

The Minnesota Indian Gaming Association opposes the measure. The group's executive director, John McCarthy, told lawmakers that sports betting would threaten the casino revenue needed to fund key services.

"These revenues enable tribal governments to meet their responsibility to their people," he said.

Other gambling opponents also spoke against the bill.

Anne Krisnik, executive director of the Joint Religious Legislative Coalition, warned of potentially high social costs from legalized sports betting.

"We have a number of problem gamblers already in the state. We have serious concerns about making that more available."

No one testified in support of the bill. Chamberlain said that was done in order to focus on the tax implications of the bill. A broader discussion, he said, could come at the next hearing.

Chamberlain also said he sees the legislation as a two-year process and hopes the tribes will eventually support it.

A separate sports betting measure introduced last month in the House has not received a hearing. The House authors say they want to come up with a plan that tribal governments will support.

Republican Senate Majority Leader Paul Gazelka said he personally opposes any expansion of gambling. But Gazelka stopped short of closing the door on Chamberlain's bill.

"We'll see," he said. "I do know that it needs a lot more time. That's the one thing I'm going to ask of that bill."