Why Minnesota Sports Betting Bill Will Wait Another Year

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Minnesota sports betting

Entering the 2023 legislative session, Minnesota sports betting appeared to have a smooth path to legalization. Then, the proposal hit a fork in the road that will push it back for at least another year.

With the Democrat-Farmer-Labor controlling the Minnesota government, a tribal-exclusive MN sports betting proposal looked primed for passage earlier this year. However, with a few DFL members opposed to gaming expansion, a tricky bipartisan negotiation emerged that led legislators to put sports betting on the back burner.

That challenge led Minnesota lawmakers to other issues, and they eventually ran out of time to reach a sports betting deal, House Speaker Melissa Hortman said during a Thursday press conference. The session adjourns Monday.

“I think we’re probably out of time,” Hortman said. “In the House, it has two or three committees and we’re not going to be able to take people away from the floor to have that bill move through the committees that it would need to. I think that there’s a coalition of folks who are still really interested in making sure that that gets done, I just don’t think it will get done this session.”

What happened in Minnesota?

The 2023 session started with DFL Rep. Zack Stephenson rolling out a tribal-exclusive sports betting bill, HF 2000, that passed the House in 2022. That bill ran into a Republican-controlled Senate that hoped to include commercial businesses in the industry, namely the two horse racing tracks in Minnesota.

During the 2022 election cycle, the DFL won control of both chambers, leaving a potentially clear path to DFL Gov. Tim Walz, a sports betting supporter. But with tight party lines and at least two DFL detractors, Republicans gained leverage in negotiations and again sought to include the tracks, which are struggling financially.

As a delicate negotiation emerged, DFL leadership prioritized other issues, passing at least 18 significant pieces of legislation this session. In 2024, Minnesota lawmakers can pick up bills where they leave off this year and discussing sports betting Thursday, Hortman said they are just heading into halftime.

Sports betting deal on the table

Stephenson’s legislation was off to a strong start in committees but ran into Republican resistance, so Stephenson turned his focus to legalizing marijuana. Earlier this month, DFL Sen. Matt Klein picked up his companion bill, SF 1949, amending the bill to send 30% of tax money from sports betting revenue to the tracks as a potential compromise.

The tribes are amendable to the plan, which is critical because they have killed sports betting legislation in the past and do not want tracks to be directly involved in the industry. While Republicans want commercial entities involved in the industry, Minnesota professional sports teams penned a letter supporting tribal exclusivity earlier this year.

The tracks, however, want more. Their CEOs argued during legislative hearings that without access to sportsbook licenses, the establishments will continue to lose business.

Minnesota sports betting proposal alive

The proposal backed by Stephenson and Klein includes 11 sportsbook licenses for Minnesota tribes. The tribes hold exclusive casino gaming rights in the state.

Along with partnering with online sports betting operators, tribes could open in-person sportsbooks at tribal casinos.

The proposal also includes a 10% tax on mobile wagers placed outside tribal land.

What happens next in Minnesota?

Lawmakers can pick up the bills where they leave off as the Minnesota legislative session carries over into 2024. However, because next year is an election year, one industry source said the chances to pass could be lower than in 2023.

Still, it was not that long ago that sports betting in Minnesota was essentially a nonstarter. A few legislators have called for MN sports betting legalization since 2017, but the issue received little movement before 2022.

So while no compromise in 2023 could be a disappointment to proponents, another year of negotiations between the tribes and tracks might make a difference.