Minnesota sports betting bill clears third committee in road to a chamber floor

Minnesota bill HF778 seeking to legalize sports betting has cleared a third committee. The proposal passed out of the House Judiciary, Finance and Civil Law Committee on Thursday by a 9-6 vote, and now heads to the Taxes Committee.

The legislation, sponsored by Rep. Zack Stephenson, seeks to permit statewide retail and online sports gaming. It had previously passed the House Committee on Finance and Elections on a 7-5 vote earlier this month in its road to a chamber floor.

As in previous occasions, the bill found backing from the Minnesota Indian Gaming Association, which reaffirmed its support during the Thursday meeting. Prior attempts to pass sports wagering bills systematically failed, partly due to a lack of support from tribes, but there’s a renewed sense of confidence things could finally change now that they are on board.

The bill leaves all profits of in-person betting in tribal hands, while tribes would also keep around 5% of the total amount wagered on mobile devices. The bill would create two master mobile licenses to be split between two groups of tribes, allowing them to partner with commercial operators.

However, and as expected given prior committee meetings developments, trade association Electronic Gaming Group expressed again its displeasure with not being considered under the bill. The group had previously warned that the proposal leaves out charitable gambling, such as electronic pull-tab games, which funds youth sports programs and services for veterans.

EGG executive director Sam Krueger had accused the legislation of picking “winners and losers” in the industry by excluding charitable gambling. Opposition is also coming from anti-gambling groups, which again voiced their concerns. Earlier this month, Anne Krisnik of the Joint Religious Legislative Coalition testified that more needed to be done to educate Minnesotans about problem gambling and to support those affected by it before the legislation goes forward.

During Thursday’s meeting, Rep. Matt Grossell sided with this line of reasoning, voicing his concerns that the legalization of sports betting could further fuel gambling addiction. He stated that approving the bill didn’t “make sense” to him.

The bill had also previously faced opposition from parties questioning why racetracks aren’t included among venues eligible for licenses. Meanwhile, a similar bill pending in the Senate would allow tracks to apply for licenses, but it is unlikely to receive support from tribes, which is seen as vital for a passage.

According to Stephenson, the House bill would permit the North Star state to keep sports gaming revenue currently going to offshore operators or neighboring states, which have all legalized their markets.

Tax revenue from mobile sports gaming would go to three different areas, explains the Minnesota House of Representatives. A portion -20%- would go to enforcement and regulation, 40% would go to the Department of Human Services to address problem gambling; and 40% to youth sports, with special emphasis on areas with high levels of juvenile crime.

Stephenson’s legislation would set the legal gambling age at 21 and while tax rates and license fees haven’t been set yet, the legislator has said he would like it to be “as low as possible” to encourage bettors and operators to abandon the black market.