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Last Thursday Minnesota Senator Karla Bigham and Representative Pat Garofalo filled a new bill, which stated that sports betting would start out in-person at casinos and racetracks and eventually move online. The state would tax in-person wagering at 6% and online bets at 8%. Should the bill pass, sports betting could potentially go into effect before the end of the year.
It was met with major skepticism for two major reasons. Bigham (DFL), and Rep. Pat Garofalo (R) are members of the minority party within their respective chambers. Also, more crucially, Native American tribes in Minnesota are not anxious to offer sports betting. There are currently 11 federally recognized tribes operating 19 casinos in Minnesota.
When asked during a recent Chamber of Commerce forum, key leaders also were not in favor of sports wagering. Most recently, Senator Roger Chamberlain (R) introduced a sports betting bill in 2020 but has not indicated a will to do so this year.
Viewing recent developments regarding success obtaining needed tax help for nearby states Michigan and Iowa, these two legislators have felt different in renewing this cause. Bigham also argued that legalizing sports betting would help put consumer protections in place and drive economic activity. She said:
We have a lot of sporting events that are hosted here in Minnesota. The Super Bowl, the NFL draft maybe, the NCAA tournaments, different things like that. This would enhance the consumer experience in that and drive economic activity.
Garafalo agreed with these points and continued to argue that legalizing sports betting would also help regulate it. In referring he said:
The important thing is to let Minnesotans do legally what they are already doing underground and that is to have a safe and regulated sports gambling market in Minnesota. The people have spoken. They want to vote on their favorite sports teams, and they want to do it from the couch.
Historically, the state’s Native American tribes have not embraced legalized sports wagering. In 2019 they wrote a letter to the governor that included a passage containing: “The Minnesota Indian Gaming Association continues to oppose the expansion of off-reservation gambling, including the legalization of sports betting.”
Although that stance has not changed since 2019, Bingham’s updated proposal reveals it would attempt to honor all tribe’s desire for no off-reservation wagering during the first year while allowing for betting at tribal casinos and racetracks.
The proposal includes a 6% tax on gross gaming revenue for retail wagering and 8% for mobile/online, following one year during which sports wagering could only take place at physical sportsbook locations. It would allow for betting on all college and professional sports. Subsequently, a new Sports Wagering Commission would be created to regulate sports betting.
Although online wagering is clearly been proven the public’s preference throughout many US states, especially driven during the continued lingering effects of COVID-19, the bill’s aim will point toward sports wagering beginning onsite initially. At least for the first year.
Bigham explained that betting on sports would start out in-person at casinos and racetracks and eventually move online. “Essentially, what it will do, is it will allow onsite sports wagering at the casinos and racetracks. After a year, remote or mobile sports wagering would be allowed through the casinos only,”
She added that most of the money would go into the state’s general fund, but Bigham said a portion of it would go to support gambling addiction, which is one issue opponents of sports wagering are most concerned about. Referencing the subject, she said:
Any time you bring this up, there is a need for maybe having the discussion about compulsive gambling and in the bill, not only can you put your name on a list that you’re not allowed to do this, that’s actually language in the bill. There’s also one half of one percent of the revenue that will go towards compulsive gambling programming.
Many other Minnesota legislators echoed negative feelings toward sports wagering legislation moving forward including Senate Majority Leader Paul Gazelka. He told the media it is unlikely the legislature will move forward on the issue during this session due to lawmakers having other priority issues to address including balancing the budget and reacting to COVID-19.
Larry Gibbs is both a seasoned journalist and a respected online gaming industry consultant. His wry commentary & sharp analysis have appeared in numerous top gaming and sports wagering publications. He has also served as Vice President of US Gaming Services, a marketing research organization with 15 years of experience in US online wagering. He has spoken at noted gaming industry conferences including G2E, GiGSE, and NCLGS.
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