Minnesota Sports Betting Bill Dies Amid Legislative Chaos

Minnesota’s hopes for legal sports betting were dashed after a tumultuous legislative session concluded on Sunday, May 19, without addressing the matter. As the year closed, Minnesota was seen as one of the few states with a genuine chance to legalize sports betting in 2024.

However, the session was marked by the arrest of a state senator and intense partisan strife. Although the House scheduled a meeting for Monday, May 20, at 10 a.m., the Senate has adjourned for the year. In the final days, the DFL and Republicans exchanged harsh words, engaged in shouting matches, and resorted to filibustering. Both chambers extended their sessions, some lasting until 5 a.m., starting last week.

Omnibus Bill and Legislative Turmoil

An omnibus bill was hastily assembled over the weekend, incorporating several critical issues to secure a vote. Sports betting was not believed to be included, but lawmakers remained uncertain. Minority Leader Mark Johnson expressed his frustration during a media briefing, urging the media to scrutinize the bill.

Lawmakers did manage to ban historic horse racing machines at the state’s racetracks on Sunday morning. However, the potential for Minnesota to become the 39th legal sports betting market vanished.

This year marks the first since the 2018 Supreme Court decision overturning the Professional and Amateur Sports Protection Act that no state has legalized sports betting through the legislature. Stakeholders had high hopes for Alabama, Georgia, Minnesota, and Missouri in 2024, but none succeeded. Alabama’s sports betting provision was removed from a broader wagering bill, which subsequently failed. In Georgia, a bill ed the Senate but stalled in the House. Missouri’s persistent attempt to link legal wagering with video lottery terminals once again failed, frustrating sports teams who may push for a voter referendum in November.

Minnesota’s Legislative Chaos and Distractions

State Representative Zack Stephenson spearheaded the sports betting bill in the House, while Matt Klein championed it in the Senate. The bill proposed giving Minnesota’s 11 tribal nations exclusive rights to retail and digital wagering. However, opposition from the state’s two racetracks, which sought a share or a more substantial payout than the proposed $625,000 annually, proved challenging. Federal law already grants the tribes exclusive rights to operate land-based casinos.

Stephenson resolved a dispute stemming from a new law affecting charitable gaming revenue from pull-tab machines. The current setup benefits the state the most. Allied Charities of Minnesota sought changes to increase revenue, but the tribes objected, fearing the new pull-tabs would resemble slot machines. Stephenson brokered a deal to allocate $40 million to charitable gaming, but the failure of the bill means those funds are now unavailable.

Potential Future Legislation and Remaining Hurdles

The path to the session’s final day was fraught with lawsuits between the tracks and tribes, compounded by the Minnesota Racing Commission’s decision to permit HHR machines at tracks, which Stephenson then moved to ban. These distractions detracted from focusing on legal sports betting.

Beyond Minnesota, only Mississippi’s attempt to include digital betting also failed. In D.C., FanDuel’s takeover of the lottery’s GambetDC platform offered a better wagering option, but a pending D.C. Council bill might further open the market.

In summary, Minnesota’s sports betting stakeholders had seemingly reached a broad agreement, but legislative dysfunction and partisan strife thwarted its age. As tribes, tracks, charities, sports teams, and national sportsbook operators had all rallied behind the bill, its failure was particularly disheartening. This agreement included revenue-sharing arrangements designed to benefit both tribes and tracks, but the intricate political landscape ultimately proved insurmountable.

Republican Rep. Pat Garofalo lamented the timing and external events, such as Sen. Nicole Mitchell’s arrest, which exacerbated partisan tensions. The DFL’s reliance on her vote became a sticking point, hindering the bipartisan cooperation necessary for the bill’s success.

Looking Ahead: Uncertainty and Optimism for 2025

With the session’s chaotic end, the possibility of a special session remains, though optimism is tempered. The election year for House further complicates the political landscape. Stakeholders remain hopeful for future negotiations but recognize the challenges ahead.

Rep. Zack Stephenson expressed his commitment to continuing the effort, citing meaningful progress and the potential for future success. However, skepticism persists, particularly from figures like Running Aces CEO Taro Ito, who remain cautious about legislative prospects and future negotiations.

The path to legal sports betting in Minnesota is fraught with uncertainty, but the determination of stakeholders to find a workable solution remains strong. The legislative sessions will be crucial in determining the fate of sports betting in the North Star State.

Source:

“Minnesota sports betting bill dead at end of chaotic, marathon day”, igamingbusiness.com, May 20, 2024.