Minnesota Lawmakers Advance Sports Betting Bill a Second Straight Week

Efforts to legalize sports betting are gaining traction in the Minnesota Legislature.

Last week, HF 2000 successfully moved through the House Judiciary Finance and Civil Law Committee just two days after progressing out of the House Commerce, Finance, and Policy Committee. The legislation, introduced by Rep. Zack Stephenson, seeks to authorize retail and statewide mobile sports betting through exclusive wagering licenses to be awarded to the state’s 11 tribal nations.

Each of the 11 tribes in Minnesota would receive a license allowing them to operate one physical sportsbook and one digital platform, or “skin.” The tribes would pay an annual fee of $2,125 for the license to offer online sports betting in the state.

The tribes could enter into agreements with top sportsbooks such as DraftKings, FanDuel, and Barstool Underscoreg to provide mobile sports betting services in Minnesota. These companies would need to pay a $38,250 fee for a three-year license, along with a $6,000 application fee.

Online sports betting in Minnesota would be subject to a 10% tax on adjusted gross revenue, with the funds going towards gaming regulation, consumer protection, programs addressing problem gambling and supporting youth sports. Retail sports betting would not be taxed.

During a hearing, Rep. Stephenson mentioned that a fully developed sports betting market in Minnesota could generate around $12 million in annual tax revenue. The proposed bill also includes a provision to establish the legal betting age as 21. The next step for HF 2000 is to be reviewed by the House Public Safety, Finance, and Policy Committee.

The pulse of Minnesota sports betting

The bill proposed by Rep. Stephenson has garnered strong support from all of the state’s tribes, professional sports teams, and the Minnesota Indian Gaming Association (MIGA).

The leaders of six Minnesota sports teams expressed their strong desire to collaborate with the Tribes as equal stakeholders in the effort to create a thriving market with a wide variety of betting brands, in a letter endorsing Stephenson’s bill.

In previous negotiations over the legalization of sports betting in Minnesota, tribal exclusivity has been a major issue. In 2022, a bill passed the House but faced opposition in the Senate due to its exclusion of the state’s two horse racetracks, Canterbury Park and Running Acres. Despite an amendment being added to include the tracks, the bill ultimately failed to pass.

Tara Ito, CEO of Running Acres, stated that for the past 38 years, Minnesota racetracks have been the sole providers of sports betting. She also mentioned that Running Acres has accepted over 10 million sports bets since its establishment.

This year’s bill excludes racetracks from obtaining sports betting licenses. It remains to be seen whether an amendment will be introduced to include Canterbury Park and Running Acres. MIGA is against racetracks being added to the bill, and Governor Tim Walz has previously stated that he will only sign a sports betting bill endorsed by the state’s tribal gaming association.

When Rep. Stephenson first proposed this bill, he jokingly stated that it was unfair for Minnesotans to have to travel to Iowa for entertainment. This comment implies that residents are crossing state lines to partake in legal sports betting offered by companies like Caesars, PointsBet, and BetMGM among the 17 mobile sportsbooks available in Iowa.

However, Minnesota sports betting faces threats beyond just neighboring states. It is believed that over one million residents of Minnesota engage in illegal sports betting, wagering more than $2.5 billion annually.

Despite the fact that the Gopher State is one of only 14 states that have not yet approved legislation for a legal sports betting industry, HF 2000 offers a promising opportunity for this to change.