Legal Minnesota Sports Betting Bill Clears Another Hurdle, But Obstacles Remain

The push for sports betting in Minnesota has cleared another hurdle. But the latest gambling bill isn't out of the woods yet. Legal Minnesota sports betting still has a few more obstacles to overcome.

Let's start with the positive news, though: The 2023 Minnesota sports betting bill is breezing through legislative sessions so far. Last week, the initiative known as HF 2000 survived its third committee of the year. That's a big deal.

Next up for HF 2000? Minnesota's House State and Local Government Finance and Policy Committee, which needs to offer their stamp of approval, as well.

Industry experts expect HF 2000 to make it through the next round of deliberations without much resistance. But that's not exactly breaking news. Last year's Minnesota sports betting bill made it all the way to the Senate before ultimately fizzling out. Should we actually expect this year to be any different?

Important Details of the 2023 Minnesota Sports Betting Bill

In response to last year's failed bid, this latest Minnesota sports gambling initiative has incorporated a few notable changes. After perusing the details of the proposal, we have highlighted our most notable items below:

• HF 2000 would contribute 40 percent of the tax revenue generated from legal gambling to programs aimed at supporting problem gambling
• The bill awards sports betting exclusivity to Minnesota's 11 active tribes
• Tribal exclusivity extends to both in-person wagering and online sports betting
• Out-of-state sportsbook operators will be allowed to partner up with Minnesota tribes to provide online betting experiences; each tribe would be allotted "one betting skin and a retail location"
• All gross gaming revenue will be taxed at a 10 percent rate; this includes online sports betting revenue, which is often taxed at higher rates in select states

House File 2000 has received plenty of bi-partisan support to date. Most of the Minnesota pro franchises support the sports betting bill, as well. The real difference-maker? Awarding sports betting exclusivity to Minnesota tribes. That became a point of contention last year—so much so it inevitably derailed the entire Minnesota sports betting plan.

What Obstacles Still Face Minnesota Sports Betting?

Theoretically speaking, plenty of roadblocks still stand in the way of Minnesota and legal sports betting. HF 2000 still needs to pass through a number of other committees. But just like last year, those checkpoints are considered formalities. Minnesota sports betting once again has enough widespread support to reach the Senate. 

What happens once HF 2000 reaches the Senate is still anyone's guess. At that point, two potential pitfalls await.

First and foremost, there is another piece of betting legislature on the table. SF 1949 would open up the state's doors outright, allowing online odds providers to operate mobile applications inside Minnesota. It isn't clear whether the tribes will push back against these terms. It helps that both SF 1949 and HF 2000 can receive green lights; they are essentially companion bills. But Minnesota tribes have expressed a disdain for surrendering the gambling exclusivity they currently enjoy.

Beyond this, there's always a chance that 2022 repeats itself. Last year's Minnesota sports betting initiative made it all the way to the Senate in a similar form. At the last minute, though, certain officials insisted on adding an amendment that would allow Minnesota horse racing tracks to offer sports betting.

That 11th hour tweak ended up being a deal-breaker for tribal operators, and the bill dissipated from there. Will the same set of lawmakers once again push for horse racing tracks to be part of HF 2000? And what happens if they do? We can't be certain.

Most Signs Point to a Positive Outlook for Legal Sports Betting in Minnesota

At present, we would bet against HF 2000 getting derailed by a surprise addendum. From the sound of things, it seems like tribal leaders are more involved with the crafting of this bill. And their feedback has generally been ultra-positive. Consider what the executive director of the Minnesota Indian Gaming Association (MIGA), Andy Platto, recently told the Minnesota Post:

“Were your bill to become law, MIGA Tribes believe the resulting mobile and retail markets operated by Minnesota Tribal Nations would not only support Tribes, but would also provide a well-regulated and accessible market for the state’s sports bettors and a competitive market that is important to our state’s professional sports team and market partners."

That doesn't read like someone who expects the current Minnesota sports betting efforts to be impeded by sudden alterations to HF 2000. Then again, many were surprised by what happened last year. That's why MIGA tribes have also noted they will continue to "monitor the bill," according to Legal Sports Report.

Assuming HF 2000 enters the Senate untouched, that leaves Minnesota's companion bill as the final hurdle. And the existence of SF 1949 raises tons of questions. Do Minnesota tribes see it as a threat? Or are they prepared to let both initiatives pass knowing they'll still be partnering up with online operators?

The answers to these questions will have to wait a while. But it's worth noting that Minnesota tribes have pushed for gambling—and more specifically, sports betting exclusivity—at every turn. They might view SF 1949 as an existential threat rather than a companion initiative. If that's the case, it presents a worst-case scenario: Minnesota tribes could pull their support of HF 2000 if it looks like SF 1949 has enough traction to pass. And in the event that happens, Minnesota's entire legal sports betting campaign could fall by the wayside...again.

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