Minnesota sports betting bill granting tribal exclusivity passes second committee in a week

A Minnesota sports betting bill that would approve statewide wagering with tribal exclusivity has passed its second committee in a week. Rep. Zack Stephenson’s proposal was moved forward on Thursday by the House Judiciary Finance and Civil Law Committee; and was voted out of the House Commerce, Finance, and Policy Committee earlier on Tuesday.

The wagering plan, HF 2000, now heads to the Public Safety Finance and Policy Committee. It would allow sports wagering on both a retail and statewide mobile basis, and has the backing of the Gopher State’s 11 tribes and professional sports teams. Under the bill, all tribes would be licensed for wagering and entitled to one retail sportsbook and one digital platform.

During Thursday’s committee meeting, DraftKings’ David Prestwood, Government Affairs Manager, testified in person in favor of the bill, while the Minnesota Alliance on Problem Gambling and the Joint Religious Legislative Coalition opposed it. Prestwood said the bill’s passage would regulate the market at a time in which estimates show more than 1.17 million Minnesota residents participate in illegal sports betting, placing more than $2.5 billion in illegal bets a year.

Stephenson advanced a similar bill that passed the House last year but was amended in the Senate to include two horse racetracks among the list of entities that could be licensed for wagering. This move, however, cost the plan the support of the Minnesota Indian Gaming Association, and the legislation finally died in the Senate.

In this year’s proposal, the tribes would be directly licensed as sports betting operators, and would be able to contract with commercial entities such as DraftKings or FanDuel to offer betting. The activity would be taxed at 10% of adjusted gross revenue, the legal betting age is set at 21, and the bill calls for funding for problem and responsible gambling programs.

According to Stephenson, the proposal would fund itself in regard to paying for oversight and regulatory costs. Moreover, 40% of the state’s revenue share would go to responsible gambling programs, and another 40% would be earmarked for youth sports programs. Rep. Stephenson noted during a hearing that a revenue estimate from 2022 reported that a mature Minnesota sports betting market could result in roughly $12 million in taxes per year.

While Minnesota sports teams would not be able to offer sports betting in this legislation, the franchises have still publicly supported the bill. Proponents argue it will displace the illicit market and provide consumer protection and ensure game integrity. Although previous efforts to bring legal betting to the state failed, this time could make a difference, as the legislation keeps slowly making its way to the chamber floor with many key stakeholders supporting its passage.