Minnesota Sports Betting Bill Passes Senate Committee

After a string of setbacks and generally pessimistic projections, the push for sports betting in Minnesota just received a major boost. The latest Minnesota sports betting bill recently passed through a Senate Committee, suggesting the measure has a stronger than expected chance to become a law by the end of this year's legislative sessions.

Don't take this as an opportunity to do a victory lap. Not yet anyway. But you are free to breathe a sigh of relief. The North Star State would have seen sports betting hopes dashed entirely for this year if the Senate Committee rejected the initiative. This is just one step in a long process, but it's nevertheless an important one.

It also breaks a trend of procedural losses. The latest letdown came in the House of Representatives, where the 2023 Minnesota sports betting bill received less support than expected before heading to the Senate. But in recent weeks, momentum started to mushroom during higher-level conversations. And while many weren't sure whether those feelings would translate to the Senate, the tenor of discussions is starting to change.

How can we be sure, you ask? Because Minnesota seems like they are, at long last, making progress on an issue that has derailed past legal sports betting campaigns.

What's Next For the Minnesota Sports Betting Bill?

After passing through the Senate Committee with an 8-5 vote, the newest Minnesota sports betting bill will head to the Rules Committee. Assuming it passes the sniff test there, it will head to the Taxes Committee. From there, it could be taken to the entire Senate for final deliberation.

Most expect the Minnesota sports betting bill to pass through its next two committees. But the full Senate body remains a wild card. Rochelle Olson explained why for the Star Tribune:

"The DFL has a 34-33 edge in the Senate, but the bill would need bipartisan support to pass because some Democrats oppose an expansion of gambling. Under [Senator Matt] Klein's proposal, each of the state's 11 American Indian tribes would be able to get one license to partner with a sports gambling platform such as FanDuel, DraftKings and BetMGM. The platforms get most of the revenue, he said, but the state is expected to receive $30 million annually. Of the state money, Klein said some would go to the Department of Human Services to address problem gambling and some would go toward youth sports and addressing juvenile crime."

The aforementioned adjustments are aimed at generating as much bipartisan support as possible. Like Olson noted, too many Democrats currently oppose legal sports betting in Minnesota to rest on one-party success. Lawmakers also need to ensure they have the support of the state's 11 tribes. They currently have exclusivity over gaming activities. Though they have been more open to discussing the expansion of gambling than tribes in other states, their official stance has wavered from time to time.

At the moment, however, Minnesota appears to have their support.The current gambling bill includes a provision that would allow casinos to partner with some of the top online sportsbooks to offer mobile betting services. These terms aren't unique to Minnesota. Other states have similar setups in place. But as Minnesota Indian Gaming Association executive director Andy Platto has explained, online sports betting partnerships stand to benefit casinos in more rural areas that are struggling to generate revenue from on-site traffic.

Racetracks Remain the Key to the Legalization of Minnesota Sports Gambling

In past attempts to legalize sports betting, the conversation has fallen apart due to division over how racetracks will be treated. The state's racetracks want the ability to offer sports betting. Minnesota's tribes have generally opposed this, because again, they have gaming exclusivity. And where allowing online sportsbooks to operate in the state can still benefit tribes, the racetracks are seen as competition that only eats into the former's business.

The vast majority of industry experts assumed this would once again be a sticking point. In fact, most outright assumed it would once again scuttle Minnesota's sports betting hopes. But Senator Klein introduced an amendment that has dramatically shifted the discussion.

As Olson relayed: In the revised proposal, Klein said sports gambling would be taxed at 10 percent with 30 percent of that going to an economic development fund for the tracks capped at $20 million. After that initial infusion, the two tracks would split $3 million a year."

Finding a way to incorporate state racetracks without giving them a sports betting license is absolutely massive. And it's reflected in the results. The 8-5 vote in the Senate Committee included multiple affirmations from Republican lawmakers who previously opposed the initiative.

So, Will Minnesota Sports Betting Get the Green Light in 2023?

This is where our warnings against taking a victory lap become a factor.

It isn't yet clear whether Klein has turned enough Republicans to get the necessary support from the full Senate. The bill may need to undergo further alterations. A handful of Republican officials, for instance, still think the measure needs to benefit racetracks more effectively if they're not getting gambling licenses.

Minnesota has time to find the middle ground. It's not a lot of time, to be sure. The 2023 legislative sessions are scheduled to adjourn for good on May 22. But that's still time. And the state has made a ton of progress in a short amount of time. It was barely two weeks ago that the Minnesota sports betting bill appeared to be on life support.

Would we guarantee this measure gets the stamp of approval required from the majority of the Senate? Absolutely not. If nothing else, though, the odds of Minnesota legalizing sports betting in 2023 have improved—not incrementally, but by leaps and bounds.

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