Minnesota House Divided Over Sports Betting

Minnesota's sports betting legislation faces an uphill battle in the Senate this session, with tensions rising between Minnesota Indian tribes and the state's horse racing industry. In a recent session of the House Taxes Committee, an amendment to remove sports betting regulations from HF2000 was narrowly defeated, highlighting the ongoing debate within the legislature.

Led by Committee Republicans, the amendment aimed to strip HF2000 of sports betting and daily fantasy sports regulation, leaving only a tax cut for charitable gaming. However, the amendment fell short by a single vote, with a vote count of 9-10-2. Representative Greg Davids, who sponsored the amendment, expressed his support for fixing the tax rate for charities but voiced opposition to legalizing sports betting.

Davids stated, “What we did last session was a huge mistake, devastating for our charities…Now when we’ve realized what we did, we’re trying to fix it.” Despite Davids' concerns, the committee ultimately advanced HF2000 by a 12-9 vote, signaling a continued push for sports betting legislation.

The disagreement over sports betting legislation is just one facet of a larger conflict between Minnesota's Indian tribes and the state's horse racing industry. Last year, the Minnesota House passed a sports betting bill with exclusivity for the state's 11 Indian tribes. However, Senate Republicans supported including horse racing in the bill's benefits.

Negotiations between the two parties broke down, with Minnesota's two tracks, Canterbury Park and Running Aces, and tribes failing to reach a revenue-sharing agreement. Recent developments have further exacerbated tensions:

• In January, tracks requested approval for historical horse racing (HHR) machines from the Minnesota Racing Commission.
• In March, the Senate amended sports betting bill SF1949 with a new revenue-sharing offer from tribes, which tracks deemed inadequate.
• The commission approved 500 HHR machines for each track, prompting Rep. Zack Stephenson to add an HHR prohibition to HF2000.
• The Shakopee Mdewakanton Sioux Community (SMSC), Minnesota's largest gaming tribe, filed a petition to overturn the commission's HHR approval.
• Running Aces responded by suing three tribes in federal court, alleging illegal card games.

The impasse over sports betting legislation has significant implications for charitable organizations in Minnesota. Last year, the legislature outlawed certain electronic pull tab games offered by charitable gaming, leading to projected revenue losses for charities.

Stephenson's HF2000 bill seeks to use online sports betting revenue to provide a tax break for charities, potentially amounting to $40 million. However, concerns were raised about the bill's viability, with some suggesting a standalone bill for tax breaks to charities.

Despite the challenges, Representative Dave Lislegard encouraged charitable organizations to continue advocating for the bill, emphasizing the importance of their cause.

 

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The Anticipation for the future

With three weeks left in the legislative session, the fate of Minnesota's sports betting legislation remains uncertain. Representative Bjorn Olson expressed skepticism about the bill's passage this year, citing ongoing disputes in the Senate. However, Representative Stephenson remains optimistic, urging colleagues to persevere in their efforts to pass the legislation.

As the legislative session draws to a close on May 20, the outcome of the sports betting legislation will likely hinge on the resolution of conflicts between tribes and tracks, with hopes for a compromise before the deadline.