Legalising sports betting in Minnesota just got a lot trickier

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Since the start of the session, Senator Matt Klein and Representative Zack Stephenson have been shepherding their state-wide, online mobile bills through the state’s long committee process. Stephenson brokered a deal between the tribes and charitable gaming to take one long-standing barrier to legal sports betting in Minnesota out of the way.

And then came 1 April when Minnesota’s horse racing commission voted to allow historical horse racing at horse tracks. Some say this is a violation of the state’s exclusivity agreement with the tribes and others say is outright illegal. The machines look similar to slot machines and in most jurisdictions are considered games of chance. This is also an area for which the tribes have exclusivity.

Whatever the situation, the decision has raised tempers. On 3 April Stephenson said in an informational hearing before the House Commerce, Finance and Policy Committee, of which he is chair: “I just want to be clear; in no universe will a bill leave this committee with historical horse racing.”

New bills to consider

A day after the hearing, Senator John Marty dropped a bill that would put a 40% tax rate on legal sports betting. It also prohibits HHR, bans in-game wagering and sends significant funding to problem and responsible gambling programmes. Stephenson added an amendment to his wagering bill and a separate bill that expressly prohibits HHR.

House and senate committees will hold hearings on the new bills today (8 April) and tomorrow.

The Minnesota Indian Gaming Association (MIGA), which has been present and is monitoring the progress of betting bills throughout the session, used its strongest language yet in response to the racing commission.

MN DFL House members are retaliating big-time against the Minnesota Racing Commission’s approval of historical horse racing games @CanterburyPark and @RunAces. Reps. Stephenson, Hortman and Klevorn introduced a standalone bill today to outlaw HHR and electronic card games.

— Rachel Blount (@BlountStrib) April 4, 2024

“Slot machines not located on tribal land remain illegal in Minnesota,” MIGA executive director Andy Platto said in a statement Tuesday according to the Minn Post. “After decades of debate at the capitol on the topic, the Racing Commission decided to usurp legislative authority and unilaterally authorise slot machines at the state’s horse tracks. We will strongly oppose any efforts to implement the Commission’s decision and will be looking at all available options.”

For tribes, exclusivity, sovereignty at stake

It is clear that MIGA will continue to lobby against HHR and any bill that would infringe on its exclusivity. MIGA could also take legal action if necessary.

Among the key sticking points in passing legal sports betting in Minnesota over the last four years has been how the state’s horse tracks fit into the equation. The tribes want to protect their exclusivity and, by extension, sovereignty.

Minnesota’s horse racing industry has been in decline for many years. In some states, such as Illinois, Louisiana and Massachusetts, horse racing has been propped up by legal sports betting. This is because it is legal in those states for the tracks to offer on-site and, in some cases, digital sports betting.

Study: HHR would bring $5.9m for purses

However, there is no precedent for a state with gaming tribes with majority market share to then cede provision to horse racing tracks. Legislators have offered up ways to compensate the tracks to try to prop them up. Stephenson’s latest bill has $625,000 that would be directed to purses, which commerce committee member Ann Neu Brindley called “pennies”.

Wish I could bet the under from my mobile app. Too bad Minnesota is 1 of only 12 states without legalized sports betting yet. #getitdonealready pic.twitter.com/KmxJy9Z4O2

— JoRdAn 23 (@JasonLindert) April 6, 2024

The Minneapolis Star-Tribune reported that a study commissioned by the tracks showed that HHR would bring in $5.9m for purses and could also fund retired racehorse programmes, the state breeders fund and cover regulatory costs.

But the situation in Minnesota just got more heated and likely more difficult to solve.

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