Minnesota House Sports Betting Bill Takes First Step With Tribal Support

Written By Matthew Kredell on March 9, 2022
11 Possible Mobile Sportsbook With Tribes Support On Minnesota Bill

A Minnesota sports betting bill took its first small step through the legislative process Tuesday. But a big leap that took place in that the legislation, at least tentatively, has tribal support.

Rep. Zack Stephenson amended House File 778 with new language in the House Commerce Finance and Policy Committee. The amendment provides exclusivity on Minnesota sports betting to Native American tribes located in the state.

This includes statewide mobile sports betting operated by the tribes in partnership with commercial operators. All 11 tribes may offer a mobile sports wagering platform.

While the bill advanced through the committee by an 11-4 vote, Stephenson said it would take another six committee stops.

This might be why Minnesota tribes only gave the legislation a tepid offer of support.

Andy Platto, who serves as executive director of the Minnesota Indian Gaming Association, representing 10 of the 11 tribes, said:

“Tribal leaders are now reviewing the delete-everything amendment and hope to soon be as comfortable with the details as they currently are with the general framework. But, in concept, the (amendment) does recognize that tribes as the state’s gaming experts are best positioned to operate Minnesota’s sports betting market both in retail and mobile environments. For these reasons, I’m pleased to ask the Commerce Committee to approve the bill today.”

Complicated tribal licensing creates robust market

Sen. Roger Chamberlain, who sponsors sports betting legislation in the Senate, told PlayUSA last week that he was concerned that the coming House bill attempted to limit mobile sports betting platforms to two.

It’s understandable that he would interpret the House bill that way, given its convoluted licensing language. But PlayUSA confirmed with bill co-sponsor Rep. Pat Garofalo that it creates the possibility of 11 sportsbook apps in the state.

The confusion lies in that the bill allows for two master mobile sports betting licenses valid for 20 years.

One master license goes to the seven tribes located north of Interstate Highway 94. The other goes to the four tribes located south of the highway.

The master licensees then contract with tribal entities as mobile sports wagering operators. And the operators can then each contract with one mobile sports betting platform provider.

This confusing method appears to be some sort of workaround for licensing sovereign tribes for statewide gaming outside of Indian lands.

Additional details of Minnesota sports betting bill

Stephenson explained that he spoke with all 11 tribal nations, Minnesota’s professional sports teams, sports betting companies, officials from the University of Minnesota, and experts on problem gambling to craft the new sports betting language.

Here’s what he came up with:

  • Minnesota tribes can offer brick-and-mortar sports betting through compact amendments and statewide mobile sports betting
  • Tribes pay nothing for the master license and only a $2,125 sublicensing fee
  • Sports betting platform operators pay an application fee of $6,000 and a license fee of $38,250, renewable annually for $8,500
  • Minimum age requirement of 18 years old to wager on sports
  • In addition to professional sports, authorizes wagering on college sports and eSports
  • The bill leaves the mobile sports wagering tax rate blank for now. As sovereign governments, tribes won’t pay tax on wagers made in person on tribal lands
  • The bill distributes 50% of tax revenue to the Minnesota Amateur Sports Commission, 40% to a compulsive gambling treatment program, and 10% to cover regulatory expenses
  • The Minnesota Amateur Sports Commission will administer grants promoting participation in youth sports in areas with a high rate of juvenile crime
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Minnesota racetracks left out but have support in Senate

In giving sports betting exclusivity to tribes, the bill leaves out Minnesota sports teams and two racetracks.

Douglas Franzen of Running Aces Harness Track told the committee that excluding the racetracks would provide them significant harm. The racetracks also serve as card clubs with table games such as poker and blackjack. Franzen claimed that table game revenue has dropped in states with legal sports betting.

“If competition is good, which I believe it is, it makes a ton of sense to include the two tracks on equal terms with the tribes,” Franzen said. “Our position is not anti-sports betting, it is not anti-tribes. … But this exclusion could be a downfall.”

Chamberlain told PlayUSA that the Senate bill would include the two racetracks.

Multiple amendments shot down

Four additional amendments got voted down by the committee.

These included two from Rep. Jordan Rasmusson. One would have required in-person registration and in-person deposits and withdrawals. The other tried to raise the legal wagering age to 21.

Expect many more attempts to amend the bill through six more committee stops. Stephenson said he was open to working with colleagues.

“I think this was a really good conversation, a really good first step in what will be a long process of revising the bill,” Stephenson said. “I’m going to work hard to address some of the concerns, particularly related to young people’s access to it.”

What’s next for Minnesota sports betting effort?

Chamberlain still needs to amend Senate File 574 with the new language. He originally introduced the bill in March of last year.

Stephenson’s bill next goes to the House State Government Finance and Elections Committee.

In past years, Minnesota tribes opposed legislative attempts to legalize sports wagering, killing the efforts. It didn’t matter if bills gave exclusivity to the tribes.

With tribes on board, this effort appears different. Platto said that tribes had the time to review the impact of sports betting expansion in other states, and they found it has been a positive one.

According to local Fox 9 News, a spokesperson for Gov. Tim Waltz indicated he would sign a sports betting bill put on his desk.

Lawmakers don’t want Minnesota to be left behind. Stephenson explained that all neighboring states plus Canada now have legal sports betting.

“Ultimately, this is an idea whose time has come,” Stephenson said. “It’s time for us to enable this marketplace before we have even more black market penetration in Minnesota.”

Photo by Shutterstock.com
Matthew Kredell Avatar
Written by
Matthew Kredell

Matthew has covered efforts to legalize online gambling since 2007, interviewing more than 200 state lawmakers across the nation and four US Congressmen. A USC journalism alum, Matt started his career as a sportswriter at the Los Angeles Daily News and has written on a variety of topics for Playboy, Men’s Journal, Los Angeles magazine, LA Weekly and ESPN.com.

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