Minnesota Sports Betting Bills Fail to Pass

So much for sports betting in Minnesota being legalized this year.

Hopes for Minnesota sports betting were high entering the latter half of the 2023 legislative sessions. Multiple gambling initiatives were on the table, and there seemed to be a groundswell of support mounting for at least one of them.

Optimism reached fever pitch in early May. That's when numerous Minnesota sports betting bills advanced past the Senate Committee and became eligible for more official consideration. Majority approval wasn't exactly the expectation, but it certainly appeared to be within the realm of possibility. Especially when the state garnered plenty of tribal support for one of their initiatives. That was considered among the keys to everything. Once most of them were on board with the plan to legalize gambling, the approval felt borderline inevitable.

And yet, when Minnesota's legislative sessions adjourned at the end of last month, nothing happened. Sports betting wasn't legalized. It wasn't even voted upon at the House of Representatives or Senate levels. The state elected to table the issue instead.

What derailed the effort to legalize gambling in the end? And what does this latest setback do for the Minnesota sports betting timeline? Read on to find out.

Here's How Minnesota Sports Betting Negotiations Played Out

Initially, it looked like the tribal-backed sports betting bill (HF 2000) would get pushed through without a hitch. Not only did their support matter, but the Democrat-controlled government was supposed to be a good harbinger. However, negotiations were invariably complicated by a select group of Democrats themselves. This lead to additional issues. Pat Evans outlined what happened for Legal Sports Report:

"With the Democrat-Farmer-Labor controlling the Minnesota government, a tribal-exclusive Minnesota 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.

"'I think we’re probably out of time,' Hortman explained. '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 it gets done. I just don’t think it will get done this session.'”

Hortman ended up being correct. The Democrats ended up shifting their priorities to the legalization of marijuana when it looked like the sports betting bill wouldn't make it to the finish line.

What Exactly Went Wrong for the Minnesota Sports Gambling Bill?

In years prior, the issue of race-track betting wound up scuttling sports gambling initiatives. This year was a little different.

Indeed, HF 2000 reportedly still met some resistance from Republicans because they wanted race tracks approved for sports betting licenses. This has always been—and remains—a non-starter for the state's tribes. They argue that allowing race tracks to offer general sports betting would eat into their own brick-and-mortar business model, which is already feeling the effects from the increased use of online sports betting sites in the United States.

Contrary to years past, though, the House of Representatives cobbled together what seemed like a palatable solution. Led by Democratic Representative Matt Klein, the House amended a separate sports betting bill (SF 1949) so that 30 percent of all tax revenue generated from legal gambling would be given to race tracks.

This appeared to appease both the tribes and race tracks. State casinos didn't need to share the market with race tracks, and the race tracks themselves were given supplemental income to prop up their own business model.

Still, a handful of officials from both sides of the fence weren't keen on directing so much of the revenue to for-profit entities. In fact, it was a completely taboo topic for many, including Democratic Representative Zack Stephenson, who has been one of the biggest advocates for legal Minnesota sports betting. In the end, Klein's amendment to SF 1949 was seen as a last-ditch effort to revive what were already dying talks.

What's a Realistic Timeline for Minnesota Sports Betting?

While Minnesota couldn't get sports betting off the ground for this year, the state's gambling outlook isn't entirely bleak.

The House and Senate didn't reject these proposals outright. This gives them the ability to revisit them when they pick up during the 2024 legislative sessions. And given how much support there was for sports betting in general, there's reason to believe next year could be when it all comes together. The state seems like they are on the cusp of a compromise for the race-track issue. That's a big deal.

In the event a Minnesota sports betting initiative is approved by the end of the 2024 meetings, there's a chance any successful measure(s) will have enough time to appear on the electoral ballot that fall. If that happens, and if voters also approve one of the proposals, Minnesota can roll out legal sports betting by the end of 2024 or the start of 2025.

Now, if one of these bills isn't green lit in time for the 2024 election, Minnesota most likely won't be able to roll out sports before 2026. We'll have to wait roughly one year to find out how it all unfolds.

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