Legalized sports gambling faces decent odds this session at Minnesota Legislature

Minnesota's tribes, racetrack operators and professional sports teams all agree that it's time for the state to join the majority that already permit legalized sports betting.

Yet more than opposition to expanded gambling, what could stall a bill is the basic question of who gets to run the sports betting operations — and reap the profits. The goal isn't to build new brick-and-mortar casinos. It's about getting a license to partner with a mobile gambling platform, such as FanDuel, DraftKings or Caesars, to get a slice of the revenue.

"It seems inevitable that Minnesota is going to pass sports betting this year or next and therefore we will be at the table to help shape legislation," Minnesota Vikings Vice President Lester Bagley said.

So will the 10 tribes that eased further off their long-standing opposition in a statement last week. Andy Platto, executive director of the Minnesota Indian Gaming Association (MIGA), said the tribal nations that signed off on the statement believe they are "best positioned to provide this new offering to the state's consumers" at casinos and through mobile apps.

As it becomes legal and available in more states, sports betting has soared. According to Gaming Today, a sports betting revenue tracker, in November, sportsbooks in New York saw $150 million in taxable revenue, mostly through mobile bets. Indiana brought in $40 million and Iowa had about $6 million that month.

Opponents remain and can be expected to raise their concerns about the dangers of gambling. The Joint Religious Legislative Coalition expressed strong opposition to expanded gambling in a letter to Gov. Tim Walz and legislative leaders last March. Instead, the coalition wanted more support for problem gamblers and an increase in the legal gambling age from 18 to 21.

But sports betting has developed an air of inevitably — even for the strongest opponents, including state Rep. Greg Davids, R-Preston.

"I'm against games of chance because the house always wins," he said, adding that he's a realist who believes the votes are there for sports betting this year. "I'm probably going to lose on this one, but that doesn't mean I'm going to support it in any fashion."

Others at the Capitol on both sides of the aisle expressed openness to legalizing sports betting.

"We will be making progress on that," House Speaker Melissa Hortman, DFL-Brooklyn Park, said last week, while Sen. Karin Housley, R-Stillwater, said, "It's time to really have the conversation and get something done."

The bipartisan support is significant because while the DFL controls both chambers, the margins are slim. The House passed a sports betting bill last year but it stalled in the GOP-led Senate, and now the DFL has narrow control of the Senate.

The Minnesota Poll last fall found almost half of Minnesotans favor legalized sports betting, while a third oppose it and a fifth were undecided.

Supporters argue that sports gambling is already happening on a smaller scale. Minnesotans can place bets on horse races through their mobile devices, they can go out of state to bet on other sports or bet illegally.

Since the U.S. Supreme Court allowed it in a 2018 ruling, sports betting has become legal in all neighboring states and also Canada. The St. Croix Casino in Turtle Lake, Wis., has been advertising on TV during sports telecasts, trying to entice Twin Cities residents to make the hourlong drive to their sports book operation that opened this year. Diamond Jo casino in Northwood, Iowa, has drawn Minnesotans since it opened four years ago.

Given that they're already offering legal betting, Minnesota's two racetracks are well-positioned to offer additional betting options, said Randy Sampson, CEO of Canterbury Park in Shakopee. "The types of people that would wager on sports are very similar to those who wager on horses," he said.

For Canterbury, it may also be a matter of survival. Their 11-year, $70 million purse deal with the Shakopee Mdewakanton Sioux expired Dec. 31. "There is going to be a need to find other purse sources to keep our racing competitive," he said.

The end of the arrangement with the Mdewakanton also freed Canterbury Park to lobby for sports betting. "We do feel strongly that racetracks are part of the gaming industry and, along with the tribes and the teams, that we are stakeholders who should be part of that discussion," Sampson said.

Among other reasons for legalization, Housley cited consumer protection through regulation and helping state businesses that are losing out to neighboring states. "It helps our economy, it helps our bars and restaurants," she said.

The debate won't be about a need for new tax revenue because Minnesota already has a gigantic surplus on the table. The state also already rakes in money from other forms of gambling, notably electronic and paper pull tabs.

The House bill that passed last year included a 10% tax on net revenues for sports betting. The state Department of Revenue estimated the tax would bring in just over $5 million in 2024 and just over $12 million the next fiscal year. The bill assumed a July 1, 2023, sports betting start.

The bill directed the tax proceeds into a new sports betting revenue account with the first $4 million going to the Commissioners of Public Safety and Revenue for administration and regulation. The remaining funds were to be split evenly between problem-gambling programs and amateur sports.

Last week, when the four legislative leaders were asked at the Minnesota Chamber of Commerce dinner to place odds on the passage of sports betting this session, Hortman said, "better than 50/50," while Senate Majority Leader Kari Dziedzic, DFL-Minneapolis, put the odds at "50/50." On the Republican side, Senate Minority Leader Mark Johnson, R-East Grand Forks, said, "a little less than 50/50," and House Minority Leader Lisa Demuth, R-Cold Spring, responded, "ask Pat Garafolo."

"Obviously, it's not one of those things that has to happen; I'd like to see it happen," said Garafolo, R-Farmington, who led legislators on a field trip to Diamond Jo in 2019.

The biggest issue is who gets to offer mobile gambling on devices, he said. "Is it just the tribes or do the teams and the tracks get to participate? The tribes wants exclusivity," he said. "That's the difficult issue to resolve."

But those involved sound like they're willing to work together.

In his statement, Platto wrote that MIGA looked "forward to working with other stakeholders to develop an approach that benefits Minnesotans while protecting the Indian gaming operations."

Dave St. Peter, president of the Minnesota Twins, said the professional sports teams have spent a lot of time on the issue, have long-term relationships with the tribes and are eager to work with them.

"I would describe the teams as very aligned and trying to speak with one voice," St. Peter said. "There's a lot of different ways this could go; our number one priority is finding alignment with the tribes."

Canterbury's Sampson said, "In the end, I think there's a way it can work for everybody."