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Past bills to legalize sports betting in Minnesota involving the state’s two racetracks have been opposed by the state’s 11 powerful gaming tribes, but the industry’s top lobbyist is supporting a new amendment that would give racetracks a piece of the action but no access to licenses.
After Minnesota’s two racetracks were originally left out of bills to authorize sports betting, Senator Matt Klein, a member of the Democratic-Farmer-Labor Party (DFL), tried to garner their support on Wednesday (May 3) through an amendment to Senate Bill 1949 that would provide millions of dollars in financial aid to the state’s racing industry.
“The amendment … is our best effort to accommodate the experience of the horse tracks in Minnesota,” Klein told the Senate State and Local Government and Veterans Committee.
The committee took testimony both in support and opposition to Klein’s bill, but ran out of time to debate and take a vote on the measure with chairwoman Erin Murphy, saying she planned to take action on the measure next week.
If approved, SB 1949 would then be sent to the Senate Taxes Committee, followed by consideration in the Finance Committees before it would reach the Senate floor for a vote. The Minnesota legislature is scheduled to adjourn its 2023 session on May 22.
“It recognizes that a new form of gambling, like mobile sport betting, may have a negative impact on horse breeding and racing,” Klein said of his amendment.
To help offset any potential losses, Klein noted that 30 percent of tax revenue from sports betting would go into an economic development fund operated by the Minnesota Racing Commission and be capped at $20m. After the initial deposit, the fund would receive $3m annually.
Under his plan, sports betting would be taxed at 10 percent.
“It also legalizes Advanced Deposit Wagering (ADW), something that the [racing] industry has long asked for,” he said. “It does clarify that HHR (historic horseracing) machines are currently illegal in the state.”
Klein said his amendment was a good faith effort to garner support from the racetracks, but even as amended would not include sports-betting licenses for the racetracks.
Just like legislation being advanced to the floor of the Minnesota House of Representatives, SB 1949 would only allow for Minnesota Indian tribes to obtain licenses to offer mobile sports wagering, as well as in-person betting on tribal lands.
“We have no position on the amendment,” Andy Platto, executive director of the Minnesota Indian Gaming Association (MIGA), told the Senate committee. “If it were to go on the bill, our support for the bill would remain.”
Both Tracie Wilson, CFO of Running Aces, and Randy Sampson, CEO of Canterbury Park, testified in opposition to the bill and Klein’s amendment.
“If this bill is to pass, all constituents — tribes and racetracks — need to be treated fairly,” Wilson said. “While we appreciate Senator Klein’s efforts, Running Aces will need to find other sources of revenue to offset the last revenue with the current version of the sports-betting bill.”
Wilson stressed that the track needs to remain viable going into the future, and that the financial compensation was too limited to be effective. She suggested legislation similar to a previous Senate sports-betting proposal that would have included craps and roulette tables at racetracks and tribal casinos.
A disagreement over including racetracks in a sports-betting bill, House File 778, during last year’s legislative session derailed any chance of it passing the Senate, even though the House passed the measure.
Sampson said Klein’s amendment was a start but agreed it was not enough for the tracks to support the bill. Both Sampson and Wilson said they looked forward to continuing to seek a solution.
In total, the Senate State and Local Government and Veterans Committee approved four amendments to SB 1949 on Wednesday, including additional consumer protections such as restricting sports-betting advertising on college campuses and requiring the 1-800-GAMBLER helpline be included in all advertisements.
The amendments would also allow players to set self-imposed time and financial limits on mobile wagering apps, and delete a proposed prohibition on push notifications, instead stating that a customer must opt-in to receive them.
“I took this bill on this year for two reasons,” Klein said. “One is Minnesotans deserve legalized sports wagering, and in many cases they are already accessing sports wagering.”
Klein told the committee that many residents feel it is not the role of the state government to stand in their way and it is the job of the legislature, if that is the case, to provide some basic consumer protections to ensure the industry is safe, trustworthy and has some guardrails.
“The second and larger reason that I took this bill … is a matter of historical justice,” he added. “Tribal gaming in the state of Minnesota has restored financial independence, power and basic services to our tribes. Protecting that exclusive right to gaming as it expands into new areas is essentially continuing that work.”
