Familiar Issue Threatens Minnesota Sports Betting Legalization Efforts

The outlook on Minnesota sports betting legalization in 2024 officially doesn’t look so good. Again.

This cycle seemingly repeats itself every year. Legislation that legalizes sports betting in Minnesota starts to gain bi-partisan traction in the House and Senate. Optimism mounts. Then, it halts. Policymakers reach stalemates and crossroads and spend time haggling over details and trying to find compromises. And finally, the Minnesota sports gambling push peters out, only to repeat the process all over again.

To be fair, this latest attempt seemed different. Not only did the most recent 2024 Minnesota sports betting bills generate bi-partisan support in the House and Senate, but different versions of each made it through the necessary committees in each chamber. All that’s left is for their support to align. 

Alas, like always, that appears to be the problem. And what’s more, this lack of alignment isn’t evolving or changing. The same disagreement that nuked Minnesota sports betting hopes in 2023 is doing so in 2024.

Disagreement Between Tribes and Racetracks Could Derail 2024 Minnesota Sports Betting Efforts

In previous years, warring agendas from state tribes and racetracks upended prior Minnesota sports betting initiatives. Other factors were at play, too. Predominantly, though, this disagreement served as the biggest roadblock. 

The issue at hand: Race tracks want to have sportsbooks on-site. Tribes, which currently have an exclusive gaming compact with that state that must be amended to legalize sports betting, do not want tracks to have gambling licenses. Because one of the bills would grant market entry to online sportsbooks in the United States, they argue that allowing tracks to have their own sportsbooks would create yet another competitor that undermines tribal operations.

This has been the case for years. It remains the case now. As Alex Derosier writes for the Pioneer Press:

“A bipartisan push to legalize sports betting in Minnesota still has momentum at the Legislature, but the odds it’ll succeed this year are still unclear. This year, proposals have advanced in both House and Senate committees, but face headwinds once again as lawmakers struggle to balance the disagreements between tribal casinos and horse tracks and address concerns from charitable gambling groups. The two tracks — Canterbury Park in Shakopee and Running Aces in Columbus — say access to the biggest expansion of gambling in decades is key to their survival. But the Minnesota Indian Gaming Association wants to preserve its control over most gambling in the state.”

Can a years-long dilemma be resolved in the coming weeks, before the legislature adjourns on May 20? It all hinges on the parties’ ability to find middle ground.

Potential Resolutions for Minnesota Sports Gambling 

Two primary solutions are currently on the table. The first was broached last year, and it would give racetracks a percentage of Minnesota sports betting tax revenue to help offset the money they might lose or at least not gain without on-site sportsbooks. 

This proposal has some legs. Ultimately, though, racetracks believe a percentage of sports gambling revenue in Minnesota won’t be enough. They maintain it’s not just about losing their own potential revenue. It’s about kneecapping their bandwidth to expand their business model.

Others, meanwhile, are pushing for Minnesota to only legalize on-site sports betting. Theoretically, then, tribal operations wouldn’t need to compete with USA online sportsbooks such as FanDuel, DraftKings, BetMGM and more.

However, this approach has yet to generate any real steam. Some tribal operators still don’t want Minnesota sports betting licenses given to tracks. Moreover, because the vast majority of bets placed in the United States are processed through online sportsbooks, many state officials believe retail-only wagering winds up capping overall revenue. 

How Will the Battle Over the Fate of Minnesota Sports Betting End?

Offering a prediction here is difficult. On the one hand, it doesn’t sound like the issue between tribes and racetracks is making much headway. On the other hand, there is a clear urgency behind the latest Minnesota sports betting push.

That urgency appears born from surrounding markets. Every single state around Minnesota has green lit some form of sports gambling. There is sports betting in Wisconsin, Michigan, North Dakota, South Dakota and Iowa, all five of which envelop Minnesota state lines. Many Minnesotans are no doubt driving to one of these locations to bet on sports. And this says nothing of bettors in Minnesota wagering with offshore sportsbooks.

Missing out on prospective sports betting revenue is clearly grating on a significant number of state officials. The same goes for tribal casinos, which are looking for ways to diversify a business model founded around foot traffic. The legalization of Minnesota sports gambling would allow them to expand both their on-site offerings and give them a license to enter the online sports betting market.

This should be enough motivation to keep all key stakeholders at the bargaining table until the bitter end. But that’s not exactly comforting. After all, these talks went down to the wire in 2022, and in 2021, and also in 2020. In the end, nothing happened. And at this rate, it’s looking more and more likely Minnesota sports betting in 2024 will be the same fate.

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