More Changes to Minnesota Sports Betting Bills, But Horse Tracks Still Not on Board

Apr 21, 2023; Minneapolis, Minnesota, USA; Minnesota Timberwolves guard Anthony Edwards (1) goes to the basket as Denver Nuggets center Nikola Jokic (15) defends during the fourth quarter of game three of the 2023 NBA Playoffs at Target Center. Mandatory Credit: Jeffrey Becker-USA TODAY SportsTwo Minnesota sports betting bills are making their way through the legislatureThe State and Local Government Finance and Policy Committee most recently forwarded HF 2000 to the House taxes committeeHF 2000 and SF 1949 are companion bills, but both contain different elements for Minnesota sports betting

A Minnesota sports betting package recently took another step forward in committee, as legislators continue to consider two bills to legalize the new form of gaming in the state.

The House State and Local Government Finance and Policy Committee most recently approved Rep. Zack Stephenson’s (DFL-35A) bill, HF 2000, moving it forward to the House Taxes Committee.

HF 2000 and Sen. Matt Klein’s (DFL-53) sports betting bill, SF 1949, are companion pieces that both legalize Minnesota sports betting, but offer differing elements in their legislation.

HF 2000 Adds More for Minnesota Charities

Both HF 2000 and SF 1949 seek to legalize retail and online sports betting for Minnesota state tribes. The bills give tribes sports betting exclusivity, allowing each to have a retail sportsbook location and one digital skin to offer online sports betting.

The following tribes would be eligible to offer retail and/or online sports betting if bills are approved:

Bois Forte Band of ChippewaFond du Lac Band of Lake Superior ChippewaGrand Portage Band of ChippewaLeech Lake Band of OjibweLower Sioux Indian CommunityMille Lacs Band of OjibwePrairie Island Indian CommunityRed Lake NationShakopee Mdewakanton Sioux CommunityUpper Sioux CommunityWhite Earth Nation

However, both pieces of legislation contain differing gaming elements among their pages. Stephenson successfully amended HF 2000 in committee to allow for the legalization of daily fantasy sports (Minnesota is a gray state for DFS) and added $40 million in tax relief for Minnesota charitable organizations.

Interestingly, the bill allows for pick’em DFS games where players compete against the house. A number of states have recently banned these types of games, while Minnesota will choose to allow them in their borders.

While Minnesota charities and the Coalition for Fantasy Sports (which testified in favor of the bill) approved of the amendments, the bill is still not one that Minnesota horse tracks can support.

An amendment in the bill included language prohibiting historical horse racing machines, which Stephenson described as a type of slot machine that would cut into tribal gaming exclusivity, a change that Minnesota horse racing industry representatives did not support.

Time still remains in the legislative session to find a compromise, Jeffrey J. Maday, media relations manager for Canterbury Park, one of two tracks in the state, told Sports Betting Dime, but a bill will have to reflect the concerns of all parties involved to be supported.

“There is time left in this year’s legislative session, and we encourage the legislature to apply the lessons learned in other states. In states where racetracks are included as part of new gaming, racing remains strong and those state’s horse industries benefit. When racetracks are ignored, the horse industry suffers. If sports betting moves ahead this year, we are hopeful that the legislature adopts a bill that reflects the concerns of racetracks, tribal casino owners and charitable gaming, and we are certain that’s the kind of bill that Minnesotans will support.”

Stephenson’s bill currently earmarks $600,000 annually for tracks.

SF 1949 ‘Work in Progress’

The Minnesota Senate Committee on Taxes recently moved Klein’s sports betting bill, SF 1949, ahead to the Senate Committee on Finance, but not before the bill’s tax rate was doubled and sports betting tax revenue distributions were altered.

His bill has yet to be brought up in the finance committee.

The bill, a holdover from the 2023 legislative session, has been drastically altered this month.  The Minnesota Senate Commerce and Consumer committee approved an amendment to prohibit in-game sports betting in the bill. Proposed by Sen. Jordan Rasmusson (R-9), the amendment aims to allow regulators to take a “product safety approach” and add common sense tools to “mitigate some of the harms that can come from problem gaming.”

No state with legalized sports betting has a similar prohibition.

Klein further amended his bill by increasing its tax rate from 10% to 20%, pushing through alterations to the sports betting tax revenue distribution, and introducing revisions to how promotions and free bets are deducted by licensed sports betting operators.

Under the new distribution method, proposed sports betting tax revenues to Minnesota racetracks will not be capped (they had an original cap at $20 million, and then just $3 million thereafter) and state charities will receive a higher cut.

Minnesota racetracks will have 5% of sports betting tax revenues earmarked for their use.