The Minnesota Senate’s Tax Committee last week voted 5-2 to move forward SB 1894, which would legalize sports betting on tribal lands and at Canterbury Park in Shakopee and Running Aces in Columbus and by mobile apps controlled by the tribes and racetracks. Next to consider the bill will be the Senate State Government Committee.
The first committee focused on the financial issues of the bill, and didn’t really give an indication of whether senators will actually support the bill once it reaches the floor.
Although there were no witnesses in support of the bill, three spoke against it, including a representative of the Minnesota Indian Gaming Association, which represents 11 tribes; and representatives of Citizens Against Gaming Expansion and the Joint Religious Legislative Coalition.
The tribes argue that sports book will encroach on their casino business by encouraging people to make bets without visiting them, and may require a renegotiation of tribal state gaming compacts, which they oppose.
John McCarthy of the association told Sports Handle, “The tribes have invested in their brick-and-mortar facilities.” He added, “They are the economic lifeblood of reservations. … An issue I have not heard discussed is the bill’s mention of taxes for tribes. That is not something authorized by the federal government.”
Senator Roger Chamberlain, the bill’s author, said he included taxation in it because of the possible participation of the racetracks, not because he feels tribes’ gaming revenues should be taxed. “If the tribes take part, and I hope they do, many people will see it as an accessory to what they already offer,” he said. “The tribes would have to enter into a new compact with the state. We would suggest revenue sharing in a new compact. But there are two horse racing facilities in this, and they would be subject to regular tax.”
He added, “Legalize it, regulate it, make it safe and accessible to people so they can invest in their opinions and have some fun.”
Noting the tribes’ opposition to his bill, Chamberlain added, “Their business model will not last forever. Young people do not go to casinos. I go to them occasionally with my spouse and others, and I’m quite often the youngest one there – and I’m in my mid-50s.”
One study projects that the state could rake in $21.5 million annually from a 10 percent tax. Chamberlain is proposing a 6.75 percent tax and so predicts about $7 million in revenue if there is a $2 billion market in the state.
Chamberlain’s bill is one of two being discussed in the legislature.
Anne Krisnik of the Joint Religious Legislative Coalition warned about “serious concerns about the social costs, and the very clear financial costs as well” citing an 11-year old U.S. International Gambling Report that claims government spends $3 in social welfare for every dollar generated by gaming.
The Minnesota legislature’s session will end on May 21.
