Minnesota Sports Betting Bill Amended To Address Fantasy Sports Pick’em

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Minnesota sports betting

A Minnesota sports betting proposal took another step forward Thursday while taking a step toward legalizing controversial fantasy sports pick’em games.

Rep. Zack Stephenson (D) guided an expansive amendment to House File 2000 Thursday through the State and Local Government Finance and Policy Committee, which then sent the legislation forward to the Taxes Committee. The changes were made as Stephenson continues to hold discussions with various stakeholders in his attempt to legalize Minnesota sports betting.

“It is a sizable amendment that reflects a number of discussions we’ve had to improve the legislation,” Stephenson said. “As we continue to have discussions, this bill has continued to evolve … it gets a little broader.”

Legalizing Minnesota fantasy sports

Stephenson noted fantasy sports is a gray market in Minnesota under current law. Thursday’s amendment would legalize DFS alongside sports betting.

Along with conventional DFS, the amendment legalizes the pick’em games garnering increased regulatory scrutiny across the US. The language reads: “fantasy contests may include both contests wherein authorized participants compete against each other and contests wherein only a single authorized participant competes against a target score set by the fantasy contest operator.”

Patrick Gibbs, representing the Coalition for Fantasy Sports, testified in support of the amendment. The coalition includes Underdog and PrizePicks, operators that offer pick’em products that resemble sports betting prop wagers.

Charitable gaming gets tax relief

While ensuring the Minnesota horse racing industry’s inclusion in sports betting law is a sticking point for Republican lawmakers, the state’s charitable gaming organizations have become a focal point this year as well.

On Thursday, Stephenson added $40 million in tax relief measures for the charitable enterprises.

That comes on the heels of an amendment to a bill in the Senate last week that would send 20% of sports betting tax revenue to the organizations.

Republicans concerned about horse racing

Multiple Republicans during the committee meeting expressed concern not enough is done to support the horse racing industry. The legislators want the state’s two tracks to receive licenses, or more revenue from sports betting, which is set at $600,000 annually in Stephenson’s bill.

In the Senate version updated last week, the tracks would receive 5% of tax revenue. On Thursday, the Republican lawmakers also cited concern about language outlawing historical horse racing machines, which Stephenson said “are slot machines” and would cut into tribal gambling exclusivity.

Republican support of the bill is necessary as Stephenson will need bipartisan votes to pass the bill. Despite his party’s majority in both legislative chambers, there are opponents on both sides of the aisle.

However, ensuring the state’s tribes support the proposal is key, as they have killed sports betting legislation in the past. On Thursday, Andy Platto, executive director of the Minnesota Indian Gaming Association, spoke in favor of the bill.

Minnesota problem gambling concerns

Multiple legislators outlined problem gambling as a major concern with legalizing sports betting. That comes after Sen. John Marty wrote an editorial in the Star Tribune last week calling sports betting a “risky bet.” Marty chairs the Senate bill’s next committee stop.

Stephenson said the best approach to problem gaming is to regulate the industry.

“I share the concern about problem gaming, and I think everyone should … it’s a very serious issue,” Stephenson said. “Fundamentally, we should not be of the belief that just because it is illegal, it’s not happening every day.

“The right approach to this very serious public health problem is to regulate and address it with appropriate resources, and not just stick our head in the sand and pretend it doesn’t exist.”

Minnesota sports betting framework

While amendments have altered the bills, HF 2000 and Senate File 1949 are companion bills. They began last session with identical language.

Both legalize sports betting by giving the 11 Minnesota tribes exclusivity. Minnesota professional sports teams support the exclusivity.

The House bill carries a 10% tax rate, while the Senate amended its legislation to 20%. The Senate bill also now includes an unusual ban on in-game wagering, which some proponents said compromises the proposal.

Troubles for MN sports betting

This is the third year Stephenson has led sports betting legislation. In 2022, his proposal faced a Republican majority in the Senate, which amended the bill to include the tracks.

Last year, Stephenson’s Democrat-Farmer-Labor party took control of the Senate, but DFL lawmakers opted to move forward to achieve broader platform goals as the partisan difference in sports betting goals weighed the legislation down.

The tribe-track negotiations continued between sessions and remain a hurdle to final passage.