Minnesota Sports Betting Efforts on Life Support

Remember the optimism surrounding the push to legalize sports betting in Minnesota? It's apparently starting to crack and fissure. This setback isn't considered minor, either. In fact, the latest roadblock could entirely derail the legalization of Minnesota sports betting for 2023.

Worse, the primary obstacle impeding the latest bill isn't readily solvable. It has been a thorn in the side of the Minnesota sports betting debate for years. In 2022, this issue was the driving force behind an initiative to legalize gambling that had ostensibly gained a ton of traction.

Will it be the same story in 2023? Or will Minnesota resolve this recurring problem once and for all?

The Biggest Issue Facing Minnesota Sports Betting

Perhaps by now you've guessed what we're about to discuss. After all, we've talked about it in this space before. The biggest barrier facing the push to legalize Minnesota sports betting is—and always has been—the issue of racetrack gambling.

Last year, specifically, a group of Minnesota officials attempted to tack on racetrack wagering to the 2022 sports betting bill. This was—and always has been—met with an intense opposition by the state's tribes. They believe legal Minnesota sports betting should fall strictly under their purview. They not only have an exclusive gaming compact with the state, but they've argued that competing with racetracks in addition to top online sportsbooks poses an existential threat to their business model.

This didn't initially appear to be an issue for the 2023 Minnesota sports gambling bill, otherwise known as House File (HF) 2000. This proposal awarded sports betting exclusivity to in-state tribes. And that exclusivity extended to mobile gaming. Under HF 2000, out-of-state online sportsbooks would be permitted to partner up with local tribes, but they wouldn't be able to operate independently inside Minnesota.

The setup outlined in HF 2000 was initially met with widespread support. All of the state's sports franchises stood behind it, as did almost all of the local tribes. However, even as the bill to legalize Minnesota sports betting kept clearing hurdles, tribe representatives continued to say they would monitor its final form. Presumably, they wanted to make sure there weren't any last-minute policy changes that sought to incorporate sports betting at Minnesota racetracks.

Yes, Minnesota Representatives Are Once Again Pushing the Racetrack Betting Agenda

It turns out tribal representatives were smart to have their reservations. As HF 2000 continued to make its way through the legislative process, the push to offer sports betting at racetracks cropped up again.

"In March, multiple legislators brought up the intention to write an amendment to include tracks in Rep. Zack Stephenson’s HF 2000, which allocates 11 sportsbook licenses to the state’s tribes," Legal Sports Report's Pat Evans recently wrote. "Unlike last year, Stephenson’s DFL party controls both the House and Senate, as well as the Governor’s office."

Previously, this move would have effectively killed the chance to legalize sports betting throughout Minnesota. And it still might. The state's tribes hold a great deal of influence over these proceedings. Their current gaming compact all but stipulates they need to approve any measures that nudge sports betting outside their scope.

And yet, the shift in party control changes things considerably.

Stephenson, who has spearheaded the quest for sports betting in the past, is a Democrat. His party not only controls both the Minnesota House and Senate, but the state's governor, Tim Walz, is a democrat as well. If everyone at these three levels are in sync, they can seek to push the issue and leverage Minnesota tribes into acquiescing.

The Outlook of Minnesota Sports is...

Of course, party control isn't everything. We saw this just last year. Republicans introduced the 2022 addendum that attached racetrack betting to the gambling bill. Back then, they held the Senate majority. And they still couldn't get their measure through.

Getting approval from the Minnesota Indian Gaming Association (MIGA) is the key to all of this. Some tribes can still oppose the new terms of HF 2000 so long as the overseeing tribal body doesn't seek to stop it. With that said, sources recently told Legal Sports Report that at least one prominent tribe with heavy influence inside the MIGA has already pulled their support. And since then, the party line from the MIGA has started to equivocate.

Most recently, they stressed the problems, complications and dangers of Minnesota attempting to totally rewrite gaming laws. Most believe this is a not-so-subtle nod to the racetrack gambling addendum. And if that's the case, the immediate future of Minnesota sports betting could be in trouble.

You're not alone if you're taken aback by these developments, either. The road to legal Minnesota sports betting this year appeared overwhelmingly smooth once the calendar turned. There was interest from the tribes and members of the House and Senate. There was support from pro sports franchises. The matter of corporate online sportsbooks was rendered a non-issue. And above all, a one-party state like Minnesota is typically able to push through initiatives on which that party is aligned without issue.

Basically, all signs pointed toward 2023 being the year that Minnesota legalized sports betting. Now, everything has changed. And while Minnesota sports gambling isn't yet dead for the year, it's running out of time. The 2023 legislative sessions will adjourn before the end of May. The state has until then to figure out what's become an annual problem.

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