Minneapolis, MN – The possibility of sports betting finally being legal in the Land of Ten Thousand Lakes this year has sadly fallen through as local lawmakers failed to come into an agreement at the conclusion of the legislative session last May 19, 2024.
Many stakeholders were keen on the positive resolution where sports betting would be legalized in the North Star State. Earlier this month, a combined effort that saw Minnesota Indian tribes, charities, sports teams, and national sportsbook operators banding together in support of the bill’s passing, but the legislative session went by, and the bill wasn’t passed.
However, that wasn’t the case. An omnibus bill was created and included many key issues in an effort to get a vote on some issues. Sports betting is not believed to be in the bill, although lawmakers were unsure.
Lawmakers’ Attention Were Elsewhere
Minnesotan legislators seemed like they were preoccupied with other matters, namely with the issue surrounding Senator Nicole Mitchell’s arrest for felony burglary in a family-related issue a month prior.
The Democratic-Farmer-Labor (DFL) took control of the Senate by a single seat in the 2022 election. Republicans wanted her disqualified from voting on bills. When that failed, they wouldn’t support any bills that the DFL could only pass because of her vote.
This has amplified hostilities between the DFL party and Republicans in Minnesota that resulted in bipartisan opposition to sports betting in both chambers of the Minnesota legislature which equates to the bill’s passage requiring bipartisan support.
Republican Rep.Pat Garofalo remarked that the legislative session was really close on deciding on sports gambling. He also believes that if Sen. Mitchell had not been arrested for burglary that they would have passed it this year,
“When the DFL started relying on Sen. Mitchell’s vote to pass things, it was just like a turd in a punch bowl that blew up a lot of things that needed bipartisan support, and sports gambling was one of those things.” added Garofalo.
68 votes were needed to pass HF5274 and had 67 DFL votes. This meant that they needed one Republican. If Republicans were free to vote their mind, stakeholders counted 80-to-85 votes in the House.
Garofalo also notes that there are still two hangups on the bill. The first one was whether sportsbooks at tribal casinos would have a 21-minimum-age requirement and whether sports gambling through tribal compacts ever expired.
What Were the Key Details of the Minnesota Sports Betting Deal?
Historically, the legal Minnesota gambling operations needed the approval of Minnesota Indian tribes. This also stretches to legalizing sports betting in the state, and Minnesota tribes and tracks have been negotiating for the past two years and have been making ground for a potential compromise. However, disagreement among Minnesota’s 11 tribes prevented the Minnesota Indian Gaming Association from finalizing a deal with tracks at the end of each session.
For this current sports betting bill, multiple parties confirmed the deal, which centered on twin revenue sharing arrangements to gain the support of smaller tribes and tracks.
This includes a tribal equalization account that guarantees every Minnesota tribe a minimum revenue by supplementing tribes that opted not to participate or partnered with a platform provider with a low market share. This is to be funded with 15% of online sports betting tax revenue.
Minnesota tracks also got 15% of online sports betting tax revenue uncapped. For the first $12.5 million annually, Canterbury Park (with greater racing expenses) split 60-40 with Running Aces. Any additional revenue share disbursement would revert to the 72-28 advanced deposit wagering split currently in use. The tracks could put the revenue share toward all racing expenses, not just purses.
Additionally, the legislation increased the tax rate from 20% to 22% to raise revenue share.
What Does This Mean for Sports Betting and Online Casinos in Minnesota?
Rep. Zack Stephenson, one of the main backers of the sports betting bill, is still optimistic about sports betting being legal in Minnesota sooner than later:
“We’re going to come up just short on the sports betting bill this year. But in the last few days we proved that we could find a deal that all the major stakeholders could live with. Tribes, tracks, charities… That’s meaningful progress that can be a foundation for the future,” Stephenson stated in the final minutes of the legislative session.
However, given the current turbulent atmosphere in the House, better timing is needed to ensure that everyone in the legislative session would be focused on the sports betting bill. For now, Minnesota continues to be one of the US states that hasn’t legalized online casinos and sports betting.
