As the map of states without legal sports betting shrinks, there are few markets with as good of a shot to legalize next year as Minnesota.
It appeared to be a relatively clean path for Minnesota sports betting legalization entering 2023. Still, a few developments kept the issue from joining a bundle of legislation the Democrat-Farmer-Labor party could champion heading into an election year.
The DFL controls both chambers of the legislature and the governor’s office, but because of some in-party opposition, sports betting cannot pass without the help of Republicans.
The Minnesota legislative session continues to 2024, and the progress made by sports betting bills will be picked up in the new year.
With significant policy goals out of the way, the controlling DFL party is already at work finding a way for sports betting to happen next year.
“I’m optimistic it will happen,” Rep. John Huot, a DFL sponsor of HF 2000, told LSR last week. “It really sits with the negotiations between the tribes and the tracks and make sure they’re in a comfortable space and work together and get the best for us. There is a group us that want to get this past the finish line, but what we don’t want is infighting between the tribes and the state.”
DFL Rep. Zack Stephenson led a strong sports betting push in 2022 and brought back essentially the same proposal this year. After gaming expansion advanced through several committees, some DFL members emerged against it, necessitating negotiation with the Republican caucus demands to include horse racing tracks.
Without a clear path, DFL representatives moved on to easier lifts and passed more than a dozen bills addressing unrelated issues. DFL Senator Matt Klein picked up a Senate companion bill late in the session but did not move the needle far enough.
During a press conference wrapping up the session, House Speaker Melissa Hortman said DFL leadership would continue the sports betting effort in 2024.
“If the Minnesota legislature was a football game, we’re like two minutes before the end of the first half, and then we’ll have an interim,” Hortman said in May when asked if sports betting was dead. “We’ll go home, we will rest and recover, and we’ll work on a lot of these bills during the interim and we’ll come back and have another session, we believe starting around February 12.”
Stephenson’s initial proposal gave the 11 Minnesota tribes exclusive access to sports betting, including online sportsbooks. Professional sports teams in the state provided support by sending a letter backing the plan.
When the Senate picked up the discussion, Klein amended the bill to send 30 percent of tax revenue to the two horse racing tracks in the state. The tracks want more, including licenses for sportsbooks.
The Minnesota Indian Gaming Association is open to more negotiations, but support to expand licensure beyond tribes is unlikely.
Huot said Stephenson is already talking to tribes and tracks this summer. While the negotiations at the end of the 2023 session are a good starting block, much can change before next year.
“The good thing is, in the interim, the whole discussion can change,” Huot told LSR. “We’ll see what happens. The tracks really want to be involved, and I’d love to have them involved.”
Huot said the caucus trusts Stephenson and often lets him lead complicated issues like sports betting.
For the past several years, the tribes and state government have had a great working relationship, according to Huot. That is good for Minnesota because he said tribes ultimately could launch sports betting without their approval.
“It has nothing to do with the tribes. They could go ahead and do this,” Huot said. “With our caucus, if you look at the overarching theme, we’ve really tried to engage the tribes and they’ve tried to engage us on everything. It’s just part of the values of our caucus. We want to make sure they’re included and they’re returning that.”
The tribes have enough sway with the caucus and legislature; they have killed sports betting legislation in the past.
The tracks are not opposing sports betting but feel the horse racing industry needs more support. They have the support of the Republican party in the state.
The tracks are open to avenues that do not include licenses, according to Canterbury Park CEO Randy Sampson.
“In the last weeks of the Minnesota legislative session, some legislators worked to craft a sports betting bill that would be successful for racetracks, tribal casinos, and sports teams. Unfortunately, those discussions did not result in a compromise that all parties could support,” Sampson said in a statement to LSR last month. “If racetracks do not receive licenses, we believe the State of Minnesota needs to take steps to address the inevitable impact that sports betting will have on horse racing and provide additional games or financial support for racing purses and live race operations.
“Looking ahead to 2024, Canterbury Park hopes that legislative leaders bring all parties to the table together to reach a compromise on this bill. We are confident that a win-win-win is very possible, and if a plan emerges that is satisfactory to each of these groups, Canterbury Park would support it.”
In 2022, Stephenson’s tribal-exclusive sports betting proposal passed the DFL-controlled House before stalling out in the Republican-controlled Senate. The upper chamber wanted to add commercial entities, namely horse racing tracks, to increase competition in the state.
That addition was a non-starter with the tribe’s strong DFL connections and control of casino gaming exclusivity in the state. Republicans felt a strong sense they would gain control of the House in the 2022 election and pass their preferred version in 2023.
Instead, the DFL ended up retaining the House and overtaking the Senate. With DFL Governor Tim Walz supporting a tribal-exclusive sports betting model, an open road appeared available this session.
There have been calls for Minnesota sports betting since 2017, but it had little movement before the strong start in 2022. The DFL setup this year left many in the sports betting industry expecting positive news from Minnesota.
And while they were disappointed in the outcome, they appear optimistic for 2024.
“At the start of ’23, I had Minnesota on my pass list,” Fanatics vice president of government affairs Brandt Iden told LSR. “However, as we saw across the country, state capitols with one-party control had many other competing legislative priorities this year.
“Regardless of the state, bipartisanship is a must for the successful passage of gaming legislation. However, I remain optimistic that with the politics of ’23 in the rearview mirror, it’ll be an open road for sports betting in ’24.”
