Short on votes, Minnesota’s house punts legal sports betting to Friday

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Two sources told iGB that bill sponsor Zack Stephenson is short on votes to pass the bill. Earlier this month, Stephenson folded the wagering bill into one that would ban historical horse racing (HHR) machines. The betting bill is moving forward as HF 5274.

Minnesota’s 2024 regular session is set to adjourn on Monday (20 May). The legislature is running marathon sessions to get through bills about paid time off, taxes and other critical issues. Wednesday’s house session ended at midnight. It will reconvene at 11am local time on Friday.

Current bill: 20% tax, 21+, tribal exclusivity

Stephenson, a member of the state’s Democratic-Farmer-Labor (DFL) party, has been carrying legal betting for four sessions. He’s been unable to get it to the governor in part because the state’s tribes and tracks are at odds. The current iteration of the bill would give the tribes a monopoly on digital wagering. Platforms would be tethered to tribal casinos.

Stephenson’s DFL is the majority in the house, but because not all DFLers are behind the bill, it will need bipartisan support. Even if it gets out of the house, it may not pass the senate. DFL Senator Nicole Mitchell was arrested in April and then suspended from the state house. That leaves the body in a deadlock with 33 DFLers and 33 Republicans.

The bill sets a 20% tax rate on gross gaming revenue and makes the legal betting age 21. It sets aside 50% of state tax revenue to problem and responsible gaming initiatives. The bill would also legalise daily fantasy sports, which would be taxed at 10%.

Tracks, tribes, HHR make things complicated

To get the bill this far, Stephenson had to broker a deal between the state’s charitable gaming group and the tribes. The net result is that $40m of revenue from wagering to be paid to the charitable groups, who agree not to change how their pull-tab machines work.

Still at issue is how or if the state’s two horse tracks will be involved. Currently, the tracks are cut out of sports betting and $625,000 per year will be transferred to the racing commission’s economic development fund. The tracks want more, but the tribes won’t sign off a bill that gives the tracks a chance to offer wagering.

Earlier this year, Minnesota’s racing commission voted to allow HHR machines at the tracks. Stephenson almost immediately filed a bill to ban those because many stakeholders say they too closely resemble traditional slot machines.

Legal wagering has long been a fraught issue in Minnesota, and combining it with the HHR issue likely makes it more so.

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