Politics and Government

On latest lap through Capitol, backers of legal sports betting bill strain for winning formula

Sports Betting
FanDuel, DraftKings and other online gambling apps are displayed on a phone in San Francisco.
Jeff Chiu | AP 2022

A lot of stars would have to align for a sports betting bill to become law this legislative session. 

For years, state lawmakers have debated whether to legalize it and have let bills to do so languish. They’re trying again this session with a similar cast of lawmakers, but a different set of regulatory limits are being drawn into the conversation such as curbs on the kinds of bets people might be able to make.

The sports betting industry posted a record $11 billion in revenue in 2023. Minnesota is in the minority as 38 states have legalized some type of sports betting since the U.S. Supreme Court issued a decision that struck down the federal ban on state authorization of sports betting. All of Minnesota’s neighbors have some form of it.

But the issue doesn’t cut along party lines in Minnesota, and various iterations might gain some votes and lose others in a closely divided Legislature. 

In the DFL-led Senate, the majority party wouldn’t be able to muster 34 votes for a bill at this stage.  

“If I was going to support a sports betting bill it would have to be on-premise sports betting,” said  Sen. Erin Maye-Quade, DFL-Apple Valley. “I do not think that mobile sports betting is something we should have in the state of Minnesota. It would devastate families, their finances and create so many problems with absolutely zero benefits.”

It could mean Republicans are in a position to shape the bill somewhat if their votes are deemed essential.

Sports Betting Tribes
A vendor explains how to place a bet at the Skyloft Predictive Gaming Lounge inside the Golden 1 Center, home of the NBA's Sacramento Kings, in Sacramento, Calif.
Rich Pedroncelli | AP 2022

Lawmakers have mixed opinions within the Republican and DFL caucuses in both the House and Senate. The Senate bill was the one that saw committee action last week. It gives Minnesota’s 11 tribal nations control over sports betting. 

It’s anticipated that tribal nations would contract with national sports books to run the games. Tribes collect revenue for bets made in their tribal casinos and there would be no state taxes collected.  

Any bets made from cellphones outside of reservations would be subject to state taxation. That’s 10 percent on the bet made and what is paid out in winnings. That tax proceeds would go to things like problem gambling treatment and subsidies to the two horse racing tracks in Columbus and Shakopee. 

The Senate bill saw a number of amendments added to it recently, including one from Republican Sen. Jordan Rasmusson of Fergus Falls that would prohibit in-game betting. Those are micro bets that consumers place on a game while the game is actually taking place. 

“It can take a single sporting event and turn it into potentially hundreds of betting opportunities for a consumer and it can lead to loss-chasing and other concerning factors,” Rasmusson said. “If we’re taking a product-safety approach of being cautious, this is one thing for us to adopt.”

Industry lobbyists testified that such a provision would cut the betting action on the state in half.  

“No other state’s been foolish enough to try this,” said state Rep. Pat Garofalo, one of the most ardent backers of sports betting legalization. “I'm confident that if we can assemble a bipartisan coalition and address this people's concerns that we don't need to worry about that poison pill."

 Garofalo, R-Farmington, calls the Senate bill “unworkable” but said the important thing right now is that the proposal is moving forward. The House bill does not currently have a hearing scheduled in the House State Government Finance Committee.

Some of the resistance the bill faces has to do with lawmakers' concern for addiction. 

Susan Sheridan Tucker, executive director of the Minnesota Alliance on Problem Gambling, said her organization is neutral on the expansion of gambling. She said she understands people are going to gamble whether it's legal or not. 

“We understand that there's a need for revenue. But if we're going to expand gambling, which is a known activity that causes addiction to a certain number of the population, then we need to have equitable level of services,”  Sheridan Tucker said. “So far those don't currently exist.”

Sheridan Tucker points to Virginia where lawmakers passed a bill requiring gambling prevention materials in schools. She said a number of states have banned college sports betting on their in-state teams — in part because of the addictive nature of those contests on young people specifically. 

An effort to limit collegiate-game betting failed last week in the Senate Commerce Committee.

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.
John Locher | AP 2018

“A prohibition on wagering on college athletics is a carveout of about 50 percent of the market. It would be devastating to the tribes who are holding the licenses,” said Sen. Matt Klein, DFL-Mendota Heights. “In my opinion, it’s not a serious intervention to protect the health of Minnesotans who may be vulnerable to problem gambling.”

The bill has more committee stops in both chambers before floor votes and after that it could take more negotiation to arrive at a deal.

Senate Majority Leader Erin Murphy, DFL-St. Paul, wouldn’t rule out getting a bill to the floor at some point this year. House Speaker Melissa Hortman, DFL-Brooklyn Park, said the issue could go either way in the remaining time lawmakers are in St. Paul for the year.

“It’s not really a priority bill for any of the four caucuses,” she said.

DFL Gov. Tim Walz has said he would sign a sports betting bill if one reaches him.