Disagreement Over Racetracks Derails Minnesota Sports-Betting Bill

May 24, 2022
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The Minnesota legislature spent most of Monday merely listening to speeches from retiring colleagues after adjourning without reaching a consensus on bills to legalize sports betting, despite bipartisan support in the Senate and House of Representatives.

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The Minnesota legislature spent most of Monday (May 23) merely listening to speeches from retiring colleagues after adjourning without reaching a consensus on bills to legalize sports betting, despite bipartisan support in the Senate and House of Representatives.

A bill passed by the Democratic-controlled House would have allowed the state’s 11 federally-recognized tribes to operate in-person retail and state-wide mobile wagering, but the Republican-controlled Senate amended the bill last week to include betting at the state’s two racetracks.

House File 778, which passed the House on May 12, was amended last Thursday (May 19) to allow wagering at Canterbury Park in Shakopee and Running Aces in Columbus before the Senate Finance Committee approved the measure on a 5-4 vote.

The decision to include the racetracks was something opposed to by the Minnesota Indian Gaming Association (MIGA) and Governor Tim Walz, a Democrat.

Andy Platto, MIGA’s executive director, said that lawmakers from both chambers and both parties had asked the MIGA and its members for their assistance in crafting a bill to provide a legal and safe sports-betting market in Minnesota.

“The resulting legislation, House File 778, was the product of a broad stakeholder process and passed through seven committees and off the House floor with strong bipartisan support,” he said.

“Instead, the Senate removed House priorities while adding licenses for the state's commercial racetracks,” he added. “These moves were opposed by many stakeholders and lawmakers which ultimately proved fatal for the legislation.”

In a statement, Platto reiterated the MIGA’s commitment to work with any interested parties "in crafting a sports-betting bill that will not only benefit tribes, but all Minnesotans."

During a news conference on Monday, Walz was not asked about the legislature's failure to pass a sports-betting bill during its 2022 session as he instead faced questions about the legislature’s inability to reach an agreement before Sunday's adjournment over how to spend the state’s record $12bn budget surplus.

House Speaker Melissa Hortman told reporters on Friday that she did not see a path forward to legalize sports betting after the Senate “put a monkey wrench” in the bill by trying to include the racetracks as locations where wagering would be allowed.

But Republican state Senator Roger Chamberlain, the chief proponent of sports wagering in the Senate, dismissed the opposition, saying it was “long past time to legalize sports wagering in Minnesota.”

“This version is good for tribes, it’s good for tracks, and most importantly, it is great for consumers,” Chamberlain said. “It respects the tribal nations and provides a revenue steam to the state.”

Chamberlain said Minnesota lawmakers have always been willing to help the tribes but “we can’t allow exclusivity in this case because it won’t be a good product.”

He admitted last week that if the House was unwilling to change its position on limiting sports betting to tribal casinos and to state licenses controlled exclusively by Indian tribes, then “it won’t go anywhere.”

The tribal gaming lobby strongly opposed the Senate version of the bill, warning committee members that tribes would pull their support for any legislation that includes the racetracks.

In a letter to the finance committee last week, Platto wrote that House File 778 provided the state with a competitive marketplace without threatening the viability of tribal gaming.

Platto said nine of the ten MIGA tribes had supported the original proposal in the House, but were opposed to the alternative version that passed out of committee and never got a vote from the full Senate.

Minnesota’s compacts have no revenue sharing provision, but each year tribes pay more than $126m in payroll taxes for the 15,287 people employed on and off the reservation in gaming and non-gaming businesses.

Representatives Zack Stephenson, a Democrat, and Republican Pat Garofalo led the legislative efforts in the House, while Chamberlain sponsored a sports-betting bill in the Senate that was co-sponsored by Democratic Senator Karla Bigham.

“I am extremely disappointed the Minnesota legislature could not agree to pass legalization of sports wagering,” Bigham said. “This will not get any easier for future legislatures to resolve.”

Bigham took to Twitter over the weekend to remind her colleagues that Minnesota will continue to remain an island for unregulated sports wagering and under-funding of addiction services due to the lack of compromise in the legislature.

In both the House and Senate versions of House File 778, Minnesota residents would have had access to retail and mobile wagering with a 10 percent tax rate. The version of the bill that passed the House would have created two “master” mobile licenses: one for northern Minnesota tribes; and one for southern tribes. Those two master licensees could host up to 11 skins in total.

Messages left with Stephenson’s office on Monday were not returned. He has argued throughout the 2022 session that tribes were best positioned to oversee the biggest change to Minnesota gambling in four decades.

Sports betting would have raised $5.6m in 2024 and $12.8m in 2025, according to a fiscal note prepared by the Minnesota Department of Revenue.

Garofalo expressed his frustration during the session’s last day at not being able to reach a consensus, warning there was "lots of finger pointing" as to why sports betting had failed and insisting the matter was not a partisan split between Democrats and Republicans.

Minnesota joins Kentucky and Missouri as states where lawmakers have closely debated sports betting this year but ultimately fallen short of passing legislation after a bill was approved in one house of the legislature.

So far this year, Kansas and Maine have legalized sports betting, with bills still being considered in Massachusetts and for mobile sports wagering in North Carolina.

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