One of the main reasons Minnesota state Rep. Pat Garofalo supports Zack Stephenson’s bill that would legalize sports betting in the Land of a Thousand Lakes is that it will “replace the black market with a regulated industry.”
According to a recent poll conducted by KSTP News, 64 percent of residents say sports betting should be made legal. Only 17 percent said they oppose the bill, while 19 percent were still undecided.
Stephenson introduced his bill at a news conference at the Minnesota State Capitol in Minneapolis on March 7. Allies from both parties lined up behind him, emphasizing the bipartisan nature of the legislation.
There are actually two bills, with slight differences, that have been introduced in the Minnesota House and Senate. Stephenson’s bill would authorize in-person sports betting at casinos. The state’s gaming tribes would license mobile gaming operators.
Senator Roger Chamberlain’s bill would also allow retail sports betting at Minnesota’s two horse tracks.
Both bills have their critics, who worry sports betting will exacerbate problem gambling and unfairly favor gaming tribes over competing interests.
Anne Krisnik of the Joint Religious Legislative Coalition told lawmakers that more needs to be done to educate people about problem gambling: “We know that operators are going to do a great job of talking about the entertainment value of gambling, but we need to make sure that Minnesotans understand what’s at risk.”
Rep. Pat Garofalo (l.) told GGB News he supports the Stephenson bill, because he supports “replacing our black market with a regulated industry, the same as a majority of states have done. Minnesotans want the ability to bet on sports without driving to Iowa. That’s a common joke in our state. All the states around us have sports betting, so we’re kind of an island. Also residents use illegal black market sites, as well.
“Besides helping to reduce the black market, Stephenson’s bill gives consumer protections while increasing funding for gambling treatment programs,” he said.
Asked about opposition to the bill, Garofalo remarked, “When you transition a black market to a regulated industry, you’re going to have controversy as to who’s going to make money. No one should be surprised that a sports betting bill will be controversial.”
The gaming tribes support Stephenson’s bill, he added. “They have supported moving forward. A lot of things need to be negotiated in conference committee, but that’s part of the legislature process. Cooperation and compromise is how we get things done.”
There are other sports betting bills in the House, said Garofalo, “but this one is the only one moving forward. In the House it’s in the Tax Committee and in the Senate it’s in the State Government Committee. The House and Senate versions are different, which is to be expected. That’s why I encourage supporters to support whatever bill exists so it can get into a conference and you get whatever bill emerges.”
Stephenson has said he wants to keep the tax rate on sports betting revenue as low as possible to encourage bettors to stop using illegal sites.
The Senate Version
Senator Roger Chamberlain (l.) authored the Senate version of the sports betting bill. “I’d say 90 percent of it is the same” as the House bill, said Chamberlain, “but the major difference is who gets to own the biggest share of the pie: who owns the mobile licenses and the brick-and-mortar licenses, and who gets to control those pieces. My position is that it can be a win-win for everybody, tribes and consumers. That’s where most of the wrangling is. We also have charitable gaming that has to be protected, and two racetracks that need to be part of this as well.”
The main difference “is exclusivity versus non-exclusivity. Or split it up and let others besides tribes have it. The issue is that the best product for the consumers is not just two licenses. The major difference is the House has a license for a southern and northern tribe.”
His bill, said the senator, “says there would be two master licenses but they could enter into sub-licenses with the other tribes. But they must enter into a sublicense agreement for mobile sports betting with the two racetracks and six professional teams. Give them right of first refusal. The master licenses must enter into a relationship with the racetracks and sports teams. That way we are assured there will be more competition and the prices and bets will be better.”
The bills have fewer, minor differences on other revenues. “On license fees, my fees are much higher,” said Chamberlain. “If the two tribes want exclusivity, they need to pay for that exclusivity. I think that’s only fair. We have an interest in promoting a good business product, protecting the tribes, the tracks and the charitable gaming organizations. We need to give the charitable organizations some and the tracks so they remain viable. For us in the Senate it’s a no-go unless we have something for those entities.”
Chamberlain’s bill would also allow historic horse racing games at the racetracks, and reform how much charities pay for parlay betting. “Right now,” said the senator, “we want reform so the charities keep more.”
Asked to address some of the criticisms he’s heard about the bills, Chamberlain said, “It’s not partisan criticism—or it’s partisan only to a point as to who gets what. But some people just don’t like gambling. Tribes want to protect their business model and so they hate historic racing. There’s that kind of mix. I got five or six pieces of suggested language for the bookmaker part of the bill.
“There are a variety of things to address. But we got to the moon, so we can get sports betting in Minnesota.”
In a recent opinion column, the Minneapolis Star Tribune came out in favor of legal betting, saying, “Minnesota can wipe out what is now a multibillion-dollar black market on sports betting and transform it into legal, regulated industry that would benefit tribes—including poorer ones—and protect consumers while also generating funds for youth sports in disadvantaged areas.
“While there are many details to be worked out, the positives outweigh the negatives enough that the state should take this opportunity.
The comments section below seemed to reflect that view. According to one poster, “Just like with the marijuana debate, these articles bring the hand-wringers out. They never seem to understand that everyone who wants to do something is already doing it, regardless of legality, so legalizing these things will have a negligible effect on anything.”
Another wrote, “It’s time, do this. I have traveled to Diamond Joe’s (in Northwood, Iowa) on several occasions to place bets on Minnesota sports teams. I will keep doing this if this doesn’t become law. But I would prefer to keep my money in Minnesota.”