A sports gambling bill making its way through the Minnesota House of Representatives cleared one hurdle Thursday when it was approved in a voice vote in the state House Judiciary Finance and Civil Law Committee. The bill, HR2000, now moves to the House Public Safety Finance and Policy Committee.
A Minnesota sports betting bill would have to pass the state House, the state Senate and be signed by the governor, Tim Walz. There’s a companion bill in the state Senate, SF1949.
How Minnesota Sportsbooks Would Work Under Proposal
The Minnesota House sports gambling bill would legalize both retail and mobile sports gambling. It would put sports gambling in the hands of the state’s Tribal interests, which already operate bricks-and-mortar casinos, and also allow Tribal interests to partner with now well-known national sportsbook companies who presumably would operate online sportsbooks. A representative from DraftKings testified in support of HR2000 on Thursday.
Bill sponsor Rep. Zack Stephenson said he consulted with all 11 Tribal Nations in the state in crafting the law. Native American gaming interests in the state support the bill, as do the state’s professional sports teams.
It’s worth noting that a similar bill passed in the state House of Representative in 2022. But, ultimately, the Minnesota wagering proposal failed because of inclusion of horse racetrack participation — there are two tracks in the state — that Tribal interests opposed.
A 10% Tax Rate on Operators
The current House bill establishes a 10% tax rate on operators, with tax money going toward mitigating the effects of dysfunctional gambling (40%) and toward addressing youth sports and sports programming, especially in areas affected by juvenile crime. Gambling customers would have to be 21 or older.
Stephenson estimated that tax revenues from sports gambling would be $12 million a year at market maturity.
Though only a handful of people testified regarding the bill when it got its day in the legislature, one suggestion drew attention from members of the committee.
Susan Sheridan Tucker, of the Minnesota Alliance on Problem Gambling, recommended additional language to the bill to enable a state university, or some gambling-neutral entity focused on problem gambling, to request access to aggregated data. The purpose would be for conducting research to assist regulators in ensuring the integrity of the games or to improve state-funded services related to funding for problem gaming and gambling addiction. The data would remain confidential and be shared only to conduct approved research. Tucker said Massachusetts and Ohio have similar provisions.
Stephenson, the bill sponsor, said he was “intrigued” by the suggestion to allow university access to aggregated data for the purpose of research.
Neighboring Iowa Has Legal, Regulated Sports Betting
As has been the case whenever the topic of legalizing sports gambling has been raised, among the objectives for legalizing and regulating sports wagering is to eliminate a flourishing black market in sports gambling, often from offshore sportsbooks. Stephenson also made that point.
And Minnesota’s neighbor to the south, Iowa, already has legal, regulated sports gambling, as do nearby Michigan and Illinois.
The fact that a state’s residents could gamble in nearby jurisdictions and contribute tax money to those neighboring states has long been a motivation for legalizing gambling.
That reality prompted Stephenson to humorously borrow a thought from a Republican member of the Minnesota House of Representatives, Pat Garofalo.
“This is an idea whose time has come,” Stephenson said, “or in the words of my friend Pat Garofalo, ‘No Minnesotan should have to go to Iowa to have fun.’”
