Minnesota’s Sports Betting Hopes Diminish With Recent Hearing

On Thursday, February 13, 2025, the Minnesota Senate’s Committee on Government and Local Affairs dealt a significant blow to hopes of legalizing sports betting in the state, ending the discussion in a 6-6 deadlock on a proposed bill that had the backing of the gambling industry. The committee also tabled a second bill in a session that highlighted the deep divisions and ongoing resistance to expanding gambling in the state.

For at least five legislative sessions, Minnesota lawmakers have attempted to legalize sports betting, but despite growing support from neighboring states, the state has failed to pass any meaningful legislation. Thursday’s committee hearing for Senate Bill (SB) 757 – a bill designed to legalize digital sports betting – ended in deadlock after intense debate, marking a frustrating setback for proponents of the industry.

 

Industry-Friendly Bill Faces Scrutiny

The committee heard testimony from a range of stakeholders, including representatives from the gambling industry, charitable gambling organizations, and advocacy groups focused on responsible gambling. Bill sponsor Senator Matt Klein was peppered with questions about various aspects of the proposal, including concerns over gambling addiction, the price of entry for market participants, and whether college sports should be included in legal betting.

SB 757 proposed tethering 11 sports betting licenses to the state’s Native American tribes and allocating 45% of tax revenue to charitable gambling organizations. Another 15% would be directed to Minnesota’s horse tracks. These provisions were seen as key efforts to address previous concerns about tribal involvement and the allocation of tax revenue, which had hindered earlier attempts at legalization.

Despite the apparent compromises, Senator Klein faced significant pushback, particularly from Senator Erin Maye Quade. Quade raised strong objections to certain provisions in the bill, especially the inclusion of college sports in the betting framework and the possibility of allowing in-game betting, which she labeled the “most predatory” form of gambling.

Senator Quade Leads the Opposition

Quade dominated the hearing with impassioned statements expressing concern about the potential harms of legalized gambling. She emphasized that college athletes, often young and vulnerable, could be unduly affected by sports betting, noting that they lack the resources and protections that professional athletes enjoy. “College athletes are kids,” Quade said, “they don’t have security or an entourage, they live in dorms and sororities and fraternities.”

Quade proposed a significant amendment to the bill, suggesting that betting on college sports and in-game betting be excluded from the legislation. For proponents of the gambling industry, such restrictions would reduce revenue and lower the potential handle of the market, an argument echoed by industry representatives throughout the debate.

Quade also called for limits on how much individuals could wager per day. “The state of Minnesota telling everyone you can’t bet on your device more than $200 a day?” Klein responded. “It takes away self-determination and I could not support that.” This point raised further concerns about the balance between regulation and consumer choice.

Licensing Fees and Potential Barriers to Entry

Another point of contention was the proposed licensing fees in Klein’s bill. The application fee was set at $250,000 with an annual renewal fee of $83,000, which some committee members, including Senator Steve Drazkowski, argued would create barriers to entry for smaller operators. While the fees were higher than those found in some states, they paled in comparison to the fees required in other jurisdictions such as New York, where application fees have reached up to $25 million for sports betting licenses. Drazkowski argued that such high fees would effectively limit participation to only large operators.

Moreover, Drazkowski raised concerns about the potential for new crimes to emerge with legal sports betting. He specifically pointed to provisions in the bill that would create penalties for those harassing athletes over betting-related matters. “I call that insanity,” Drazkowski said, questioning the necessity of a bill that preemptively addresses crimes related to betting.

In addition to SB 757, another bill aimed at expanding gambling in Minnesota, House Bill (HB) 978, was also tabled at the request of its sponsor, Senator John Marty. Marty had previously held an anti-gambling hearing in January, which was criticized by some stakeholders as little more than a “media stunt.”

Marty’s bill proposed far stricter protections compared to Klein’s version, including a ban on gambling advertisements at events where more than 30% of the audience is under 21 and a ban on gambling ads in public buildings. However, after briefly presenting his bill to the committee, Marty chose to table it, signaling the likely end of any meaningful discussion on gambling expansion in the state for the time being.

 

Today’s hearing was disappointing considering there was an agreement in place at the end of last year’s session and even further agreement the year before that

The Road Ahead

Thursday’s hearing was a stark reminder of the challenges Minnesota faces in passing sports betting legislation. While the state is surrounded by jurisdictions with legal sports betting, including four U.S. states and one Canadian province, Minnesotans continue to travel across state lines to wager legally. As other states rapidly embrace sports betting as a means of generating revenue, Minnesota remains caught in a prolonged debate, with no clear resolution in sight.

The absence of any active house bills this session, combined with the departure of gambling champion Representative Zack Stephenson, who had worked to broker deals in past sessions, leaves little hope for progress in the immediate future. As the debate continues to stall, many are left wondering when – or if – Minnesota will finally legalize sports betting. The hearing on Thursday may well mark the end of the conversation for this year, but the push for legalization is likely to persist as Minnesotans continue to cross state borders for their betting needs.