Minnesota sports betting bill passes House committee as backers seek tribal support

A bill seeking to legalize sports betting in Minnesota was approved by the House Commerce Finance and Policy Committee on Tuesday. HF778 would allow Minnesotans to wager on sporting events both through mobile devices or in-person at brick-and-mortar venues.

The proposal was passed, as amended, 14-4 by the House committee, reports the Minnesota House of Representatives news service. It has now been sent to the House State Government Finance and Elections Committee, where it is scheduled to be heard on March 15.

“This legislation will bring about the most significant change to Minnesota’s gaming laws in many years,” said Rep. Zack Stephenson, who sponsors the bill. “State lawmakers in the Minnesota House have crafted a thoughtful bill based on respectful consultation with sovereign tribal nations, professional sports teams, experts in problem gaming, and many other stakeholders.” 

The proposal would allow Minnesota to compete with other markets and keep revenue from going to neighboring states, which have already authorized some form of sports betting. Additionally, it would permit the Gopher State to keep revenue from sports bets currently being placed through the black market.

“What this bill is about is creating a legal marketplace that will displace that black market and in doing so, provide consumer protection, ensure the integrity of the game and limit money laundering and other illegal activity,” stated Stephenson. Thus, the state would regulate the activity, to be permitted at tribal casinos or on mobile apps licensed to tribal entities.

Tax revenue from mobile sports gaming would go to three different areas, explains the Minnesota House of Representatives. A portion -20%- would go to enforcement and regulation, 40% would go to the Department of Human Services to address problem gambling; and 40% to youth sports, with special emphasis on areas with high levels of juvenile crime.

During the Tuesday meeting, Rep. Jordan Rasmusson offered two amendments to no avail: one seeking to require an in-person component to mobile apps, and a second one increasing the minimum age for mobile gaming to 21 from a current 18 proposal. This comes as several parties showed concern about a possible spike in problem gambling among young adults.

While legislation sponsor Stephenson said he shared the concern, he expressed confidence that, under a legal market, safeguards could be introduced to prevent gambling addiction. He expects such provisions to be introduced as the bill moves to additional committees.

Rep. Zack Stephenson also tackled the issue of the state’s Native American tribes' long-standing opposition to sports betting expansion. On Monday, the lawmaker expressed confidence that they would drop their concerns as the proposed bill would put them in control, reports Associated Press.

Stephenson, who met in recent months with leaders of all 11 tribes in the state, said he would not be pressing forward unless he was comfortable that they would support the legislation in the end. The representative believes this could be the case: the bill leaves all profits of in-person betting in tribal hands, while tribes would also keep around 5% of the total amounts wagered on mobile devices.

The Minnesota Indian Gaming Association, which represents tribes offering gaming in the state, has not shown opposition to the bill, instead withholding approval until details are nailed down. Tribal governments blocked prior efforts to legalize sports betting in the state, showing concern their casinos could lose profit to non-tribal sportsbook operators.

The MIGA has said through a statement that its members support current state efforts “to authorize sports wagering both at tribal gaming properties and through online platforms,” while believing tribes “are best positioned” to offer the new market, according to AP. The association will be “monitoring state legislation and look forward to working with other stakeholders."