Minnesotans flock to Iowa for sports betting as odds of legalization in their state remain long

Given a lack of legal options in their state, Minnesotans are flocking to Iowa for sports betting, according to latest data. Nearly 1 million bets from Minnesotans trying to access sportsbooks in other markets, predominantly Iowa, were blocked from going through during the NFL season and March Madness combined. Additionally, residents in the North Star State are also physically traveling to Iowa with the sole purpose of placing a legal sports wager.

The data was compiled by GeoComply, a geolocation security and compliance firm that partners with sports gambling platforms. Between the football season and NBA’s March Madness, the company was forced to block around 860,000 bets by Minnesotans trying to gamble in other states where the practice has already been legalized, reports the St. Paul Business Journal.

At the current time, Minnesota doesn’t permit sports gambling. However, it is surrounded by states with legal markets, of which Iowa is the only neighboring state with mobile gambling – a feature that has turned it into a hotspot for Minnesotans looking to gamble. As per Geocomply data, thousands of Minnesotans go to the Hawkeye State, set up a sports betting account there, and subsequently try to place wagers after crossing back over state lines.

What’s more, Minnesotans are also physically traveling to Iowa with the sole purpose of placing a sports bet: GeoComply’s data shows thousands of sportsbook usernames geolocated in Minnesota and then in Iowa a short time later. This goes to prove a healthy appetite for the legalization of sports gambling in Minnesota, which has time and time again failed to get legislation to the finish lane.

In 2022, the state’s sports wagering proposal failed in the Senate. It included a 10% tax on net revenues, generating an estimated $17.5 million over two years. Proponents say legalization will also combat black market gambling, which offers no safeguards for bettors. It remains to be seen if a bill will pass this session as tribes, pro sports teams, and key committee chairs still work on reaching an agreement.

While the issue was a hot topic going into the 2023 legislative session, it has now lost a significant amount of steam. But in the last few days, an amendment has been brought forward in an effort to increase the proposal’s odds of passage: under the plan, the state’s horse racing industry would get a slice of the sports betting pie. DFL Sen. Matt Klein, the sponsor of the sports betting legislation, told Axios he's planning to introduce changes to the bill during a Senate hearing the first week of May.

“I think it's clear that there's strong demand for legal sports betting by Minnesota consumers,” John Pappas, public affairs and government relations expert for GeoComply, told the St. Paul Business Journal. “A lot of them have accounts that are based in Iowa, and they're regularly checking their accounts when they're in Minnesota hoping that they can bet, but unfortunately, we have to block them.”

During the NCAA tournament, the firm identified about 99,000 transactions from 11,000 individual accounts in Minnesota accessing legal sportsbooks in other markets, 60.1% of them corresponding to Iowa – the efforts were blocked. And during the NFL season, approximately 740,000 transactions from more than 50,000 Minnesota accounts were blocked from betting. Iowa was again the preferred market, with 57.6% of attempts.

It’s easy to draw the conclusion that Minnesota is losing revenue to Iowa. Still, the odds of a sports betting law passing to remedy this situation remain cloudy. Klein told Axios that tribes remain “on board” with changes to include the horse racing industry, but experts are still unsure if the bill can attract the GOP votes needed to pass the Senate.