On April 30, the Minnesota House Taxes Committee voted 12-9 to send an amended version of HF2000 to the Ways and Means Committee. With three weeks left in the 2024 session, a big question mark hangs over the committee to get a bill to the governor’s desk.
Last month, Democratic State Senator Nicole Mitchell got arrested on burglary charges. As a result, the Senate took away her voting privileges, and the Democrats lost their one-vote majority.
“With the nonsense bordering on criminal in the Senate, I don’t think this bill will get out of the legislature,” Rep. Bjorn Olson said, per iGaming Business.
If it did, it would include statewide mobile wagering tied to the tribes, with exclusivity. The state tracks would receive $625,000 to placate them. As for veterans and charities? $40 million in tax relief would head their way. But some committee members called it all “false hope” that won’t amount to anything in the end.
Rep. Zack Stephenson has gone through four failed sessions in his effort to legalize sports wagering. Too many obstacles.The charity agreement got rid of one obstacle this session.
The problems with the horse tracks and tribes remain a major source of obstacles. A pair of lawsuits have made it all that more difficult. The Minnesota Racing Commission complicated things further with its vote to allow historical horse racing (HHR) machines, a no-no for the tribes and for Stephenson too.
A bunch of groups—the Minnesota Alliance on Problem Gambling, representatives from charity and veterans groups and an Underdog Sports executive—spoke in favor of the Stephenson bill.
Rep. Jon Koznick said “the bill doesn’t quite cross the finish line. I think it’s running out of steam and dying a slow death.”
But Stephenson remains undeterred.
“I appreciate the conversation although not necessarily the prognostication,” he said, per iGB. “And nothing is ever dead until sine die because we’ve seen that over and over again. So, we’ll keep working it.”
The legislature ends the 2024 session May 20.
Rep. Greg Davids, who sponsored the amendment, said he supported fixing the tax rate for charities but not legalizing sports betting.
“What we did last session was a huge mistake, devastating for our charities. … Now when we’ve realized what we did, we’re trying to fix it,” he said, per PlayUSA. “And we put it in a bill that, to some of us, is extremely objectionable. … It’s somewhat unfortunate that they’re going to go another year with nothing because this bill will not pass.”
Last year in a tax omnibus bill, the legislature outlawed certain electronic pull tab games offered by Minnesota’s charitable gaming industry. The games had already been hit with a negative court decision following a legal challenge by Minnesota tribes.
Charities project lost revenue and negative effects on the community when the changes go into effect. Stephenson reached a deal to use online sports betting revenue to give charities a tax break that could amount to $40 million, gaining their support for HF2000.
Minnesota’s two tracks, Canterbury Park and Running Aces, and the state’s 11 tribes appeared close to a revenue sharing agreement at the end of last session. However, negotiations broke down almost immediately this year. Here’s what happened:
The tracks asked in January for the Minnesota Racing Commission to approve HHR. At the beginning of this month, the commission approved 500 HHR machines for each track. The tribes balked.
In March, the Senate amended sports betting bill SF1949 with a new revenue sharing offer from tribes that the tracks deemed a downgrade.
Days later, Stephenson added an HHR prohibition to HF2000. He also filed a standalone HHR ban, HF5274, that further codifies games the tracks cannot offer.
Minnesota’s biggest gaming tribe, the Shakopee Mdewakanton Sioux Community (SMSC), then filed a petition with the state Court of Appeals to overturn the commission’s HHR approval.
Running Aces responded by filing a lawsuit against three Minnesota tribes in U.S. District Court alleging they violated the federal RICO Act by offering illegal card games.
Koznick offered an amendment removing the historical horse racing ban. It lost.
“I think there should be big concerns with the provisions in the bill that block the horse tracks from continuing to be economically viable,” he said, per PlayUSA. “We’re changing the rules in the middle of the race. There is a case being tried through the courts on whether the Minnesota Horse Racing Commission has the authority to permit the historical horse racing. What this bill does and those provisions, it closes the starting gate before the race gets off to start. That’s not the legislature’s purview.”
Rep. Dave Lislegard commented on the disappointment of the charitable organizations and encouraged them to keep advocating for the bill, saying he was not giving up on the Senate.
“I watched everyone testify in favor of the bill,” Lislegard said, per PlayUSA. “No one came and said they were against the bill. And then when I heard everybody having conversations that this bill is not going to go anywhere, I looked over at the veterans over there and watched their demeanors change as this hearing went on. And I feel for you, because basically you were told that this has no chance.”
Stephenson isn’t giving up on passing Minnesota sports betting legislation in 2024.
“I appreciate the conversation today, though not necessarily the prognostication,” he said, per iGB. “There’s a long way to go left in session, and nothing is ever dead until sine die is one of the oldest cliches about this place, but it’s because it’s true. So, let’s keep working would be my ask of my colleagues.”
