Minnesota’s Senate Tax Committee on March 14 approved an amendment that would double the proposed wagering tax from 10 to 20 percent and allow for 100 percent of promotional deductions for the first two years, before stepping down the deductions by 25 percent per year until reaching zero.
The amendment also changed how sports betting tax revenue would be divided up.
Those changes were on top of critical changes to SF 1949 made earlier in the Senate Commerce and Consumer Committee.
Key among the Commerce and Consumer Committee’s amendments—and the one which may sink the bill altogether—is the ban on in-game wagers, a popular bet elsewhere. That and other changes were viewed as practical tools to minimize problem gaming issues.
“The Minnesota Senate change to the sports gambling bill to eliminate in-game wagering is unworkable,” tweeted Rep. Pat Garofalo, a long-time sports betting supporter. “No state in the country has this type of ban. If sports gambling is going to happen this session, this poison pill will need to be removed.”
Mandating patrons to set limits on daily deposits or losses are other changes, although one option is to cancel the mandate, making it not so much of a mandate. The committee did not approve a proposal to ban wagers on college sports.
“A prohibition on college athletics is a carveout of about 40 percent of the market,” bill sponsor Matt Klein told Legal Sports Report. “It is not a serious intervention for problem gambling.”
The overall bill, if approved, would make Minnesota the safest gaming state in the nation, supporters claim. In-game bans reduce the chance players will chase after losses.
Jeremy Kudon, president of the Sports Betting Alliance, said the in-game ban could shortchange the revenue by more than $20 million. Kudon told the committee in-game wagers account for 50 percent of sports betting.
The legislation grants exclusivity to tribes on sports betting, both in retail and online, based on Rep. Zack Stephenson’s House bill.
Klein’s Senate proposal initially allocated 30 percent of the state’s sports betting revenue to the new Horse Racing Economic Development Fund regulated by the Minnesota Racing Commission.
That didn’t sit well with the tribes.
“Some of these policy changes are of serious concern,” Andy Platto, executive director of the Minnesota Indian Gaming Association told the committee. “However, tribal leaders do ask for the committee’s support of the bill as amended today so it can continue its progress in the Senate.”
“We continue to evaluate.”
In the Taxes Committee, the allocation to the tracks was reduced to 15 percent.
Tracie Wilson, CFO of Running Aces casino hotel and racetrack, doesn’t care for the disparities in funding between tracks and tribes. Specifically, a cap on track funding and none for tribes or operators.
The proposals and the continued negotiations, especially between tribes and tracks, represent the best chance for passage.
Klein’s sports betting bill also underwent further enhancements aimed at addressing problem gambling concerns.
More additions to the Senate bill include a 24/7 hotline staffed by gambling disorder and suicide prevention experts, a requirement that sports betting ads feature a warning that gambling may be addictive and could cause financial hardship.
Still, Klein told Public Gaming he is proud of the legislation the Senate has crafted. “Our work continues in future committees to create a safe and trustworthy market for sports betting in our state.”
The following tribes would qualify to offer retail and/or online sports betting if the bill is approved:
- Bois Forte Band of Chippewa
- Fond du Lac Band of Lake Superior Chippewa
- Grand Portage Band of Chippewa
- Leech Lake Band of Ojibwe
- Lower Sioux Indian Community
- Mille Lacs Band of Ojibwe
- Prairie Island Indian Community
- Red Lake Nation
- Shakopee Mdewakanton Sioux Community
- Upper Sioux Community
- White Earth Nation
