Minnesota Sports Betting Bill Escapes Committee But With Major Amendments

Minnesota’s journey towards legalized sports betting has been riddled with amendments and political footballs and the latest development sees a heavily revised version of the HF 2000 bill, pioneered by Representative Zack Stephenson, gaining approval through the House.

The original HF 2000 bill has undergone significant revisions, made by its chief proponent, Zack Stephenson. Additions include the legalization of daily fantasy sports, provisions for electronic pull-tabs, and a proposal to double the tax rate. After much deliberation, the bill has now passed the committee stage and is headed towards the tax committee.

Minnesota’s quest for legal sports betting has been in the works since 2018. In 2022, Stephenson managed to navigate his bill through the house, only to be halted at the senate. The revised bill hopes to overcome past hurdles, especially with no crossover deadline looming, as lawmakers aim to legalize sports betting before May 20th.

One of the recurrent issues in the legislative process has been the inclusion of the state’s horse tracks in the wagering arena. A senate bill, having gone through six committees, proposes a tax rate of 20% and includes horse tracks. This bill is currently en route to the finance committee.

The new amendments propose a regulatory framework for fantasy sports and more controversially, pulltabs. The latter has been a source of political contention, with disagreements over the machines’ resemblance to slot machines. The state’s tribes, who hold exclusivity over casino games, have raised concerns over this issue.

Pulltabs, Charitable Gaming, and Revenue DistributioThe amendments propose a change in the distribution of revenue from charitable gaming. Currently, the state of Minnesota receives the lion’s share of the revenue, followed by game developers and charitable organizations. The proposed amendment intends to flip this scenario, directing more funds, potentially up to $40m, towards the Allied Charities of Minnesota (ACM) over several years.

The pulltab machines’ increasing resemblance to slot machines has brewed a storm of disagreement. State democrats passed a law in 2023 to ban an “open-all” feature on pulltabs, slowing down the gaming process. This, in turn, could affect ACM’s income as games take longer. Stephenson’s amendment seeks to neutralize this political football by increasing the proposed tax from 10%-20%.

Representatives from Running Aces, one of the two tracks in the state, have voiced their concerns over the proposed amendment. They believe that the legislation, if passed, would unfairly disadvantage them and potentially decimate horse racing.

Andy Platto, executive director of the Minnesota Indian Gaming Association (MIGA), has stated that the tribe is still evaluating the bill. While some policy changes raise concerns, MIGA supports moving the legal Minnesota sports betting bill forward.

The bill’s journey is far from over. The senate bill, having already increased the tax rate to 20% and eliminated in-game betting, does not include the tracks. It also lacks the latest pulltab agreement that Stephenson has brokered. The wheels are in motion, and all eyes are on Minnesota as it navigates the complex path towards legalized sports betting.