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With just days left in the legislative session, hopes to legalize Minnesota sports betting this year are slipping away.
Negotiations between Indian tribes and horse racing tracks broke down last week and haven’t resumed, according to sources.
“It appears the most likely scenario is sports gambling will likely wait until next year in Minnesota,” Rep. Pat Garofalo told PlayUSA.
House Speaker Melissa Hortman confirmed Garofalo’s concerns in a press conference Thursday afternoon, telling reporters the legislature has run out of time to pass Minnesota sports betting this session.
“I think we’re probably out of time. In the House, it has two or three committees and we’re not going to be able to take people away from the floor to have that bill move through the committees that it would need to. I think that there’s a coalition of folks who are still really interested in making sure that that gets done. I just don’t think it will get done this session.”
Minnesota Tribes, Tracks Still Can’t Reach Agreement
Two weeks ago, Sen. Matt Klein offered an amendment to SF 1949 in a last-ditch attempt to bridge the divide between tribes and tracks.
His amendment:
- Offered 30% of the state’s 10% take on mobile sports betting revenue to a new Horse Racing Economic Development Fund to be split between the state’s two tracks.
- Capped contribution to the Fund at $3 million annually after it takes in the first $20 million.
- Directs that some money put into the fund go toward mental health programs for jockeys, stewards and backstretch employees, increasing compensation of backstretch employees, funding research projects to study equine illness and disease, performance-related accidents and industries, and improvements in breeding techniques with a study coming back to the legislature.
- Allows advanced deposit wagering at Minnesota horse racetracks.
The Minnesota Indian Gaming Association (MIGA) said the amendment wouldn’t impact its support of the overall bill.
Minnesota’s two racetracks — Canterbury Park and Running Aces — still opposed the bill.
Canterbury Park CEO Randy Sampson commented to the Senate State and Local Government Committee:
“Our main concern is that it creates a funding cliff by putting a future cap of $3 million per year on the Horse Racing Economic Development Fund. That amount when split between two racetracks and three horseman groups would not be adequate to provide the level of support needed to keep horse racing in Minnesota viable in the face of the expansion of gambling that mobile sports betting will produce.”
Reps. Zach Stephenson and Brad Tabke tried to find a solution to have tribally exclusive sports betting benefit the tracks in March.
After failing to work out an agreement between the parties, Stephenson surprisingly dropped out of the efforts. His House bill hasn’t seen action in two months.
That was not a good sign for Minnesota sports betting prospects. Stephenson took the lead on efforts last year, getting Minnesota sports betting legislation passed in the House.
Tribes involved in negotiations
After the amendment, representatives of the tracks and tribes met to try to work out the details.
Even though the horse racing benefit from sports betting would come out of the state’s end, Minnesota tribes are participating in the discussions. Tribes still have interest in how much money tracks get from tribal online sports betting.
There’s 11 tribes in Minnesota and not that many successful online sportsbook operators. So not all tribes will make big money from online sports betting. Tribes don’t want to see the tracks getting more money than any tribe.
Tracks have asked for no cap on contributions to the fund, according to sources. That isn’t acceptable to the other parties but no increased cap has been offered.
Adding craps and roulette to tracks and tribal casinos is not part of the discussion.
Running Aces and a majority of MIGA tribes were on board with a deal at the end of last session to expand those table games. And Running Aces’ Tracie Wilson brought up reviving that option in committee. But some tribes would not accept it last year and still won’t this year.
Stakeholders appear to have waited too long
Minnesota’s legislative session ends Monday.
The tracks appear willing to accept tribal exclusivity of Minnesota sports betting for a cut of the action. MIGA expressed in committee the tribes would accept the bill with the state sharing revenue with the tracks.
MIGA did not oppose the bill with the eventual $3 million cap on the annual track contribution. According to the bill’s fiscal note, the state projects its share to be $15.7 million at market maturity. Uncapped, 30% of the state share equates to $4.7 million.
So the difference between what the tracks and tribes will accept appears to be less than $2 million. That doesn’t seem worth putting off Minnesota sports betting another year.
But it appears it will do just that as legislators have waited long enough and have other priorities.
Garofalo said:
“When government decides who is going to make money, things can get ugly.”
